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Business Operational 
Research. - and Reports 


Business Operational 

Research and Reports 

JOHN G. GLOVER, M.C.S., Ph.D. Professor of Management, School 

of Commerce, Accounts and Fi- 
nance, New York University 


Chicago, Boston, Atlanta 
Dallas, San Francisco 

Copyright, 1949, by 
American Book Company 

All rights reserved 

No part of this book protected by the above 
copyright may be reproduced in any form 
without written permission of the publisher. 

glover's Business Operational Research and Reports 
Made in U. S. A. 
E. P. 1 

Dedicated to 


Research Scholar, 
Business Administrator, 
Able Banker, 
and Public Servant 


American industry has never in its history been confronted 
with such vistas of possibility, or, paradoxically, with such 
barriers to accomplishment. On the one hand lies the mighty 
growth of business, the high standard of living, and the 
unprecedented demand for consumer goods; on the other, 
intense competition, involved labor difficulties, complex legisla- 
tion, heavy taxation, and international economic maladjust- 

This situation has created an imperative need in the field of 
business management for the formulation and application of 
basic principles, laws, policies, and decisions based on scientific 

This book was written to meet the current needs of business 
executives, graduate and other students of business administra- 
tions. It presents basic procedures for conducting scientific 
managerial research and correctly reporting the findings. It is 
premised on the belief that major emphasis of managerial re- 
search must be placed on exploring the responsibilities of man- 
agement in order to find ways and means of executing them in 
a more effective manner. 

This manual will be of value to those executives and student- 
prospective executives who are responsible for making man- 
agerial decisions. The author has endeavored to outline major 
topics requiring management research and to demonstrate the 
techniques for attacking administrative and executive prob- 

The author wishes to express his gratitude to Professor 
William B. Cornell, Chairman of the Department of Business 
Management, New York University, and to his fellow faculty 
colleagues for their wise counsel and profitable suggestions. 



The author also desires to express his sincere appreciation 
for the excellent co-operation of many large industrial corpora- 
tions, which generously permitted the reproduction of valu- 
able research information; especially to Dr. R. F. Schultz, 
Director, Hercules Experiment Station, for the privilege of 
reproducing manuals on "The Preparation of Reports"; to Mr. 
Bernard F. Herberick, Director, News Department, National 
Industrial Conference Board for his kind permission to repro- 
duce "Hints to Authors"; and to Mr. E. H. Conarroe, 
Associate Manager of the Policyholders Service Bureau, 
Metropolitan Life Insurance Company, for his kindness in 
authorizing the use of valuable information from a report en- 
titled "Outline for a Management Audit." 

Thankful acknowledgment is made to Judge Norman L. 
Brundage for his legal aid in this research undertaking and to 
Mr. S. R. Hastings for his co-operation. 

/. G. G. 

Suggested Plan 

for Conducting a Course 

in Business Research 

This textbook is designed to train students to conduct sci- 
entific research in the fields of science, industry, and business, 
and to prepare proper reports. 

A course in Business Research should be a part of every 
student's program in Business or Economics, preferably in the 
senior year. It requires at least two hours of classroom instruc- 
tion and discussion, once a week for the academic year. A 
course of this nature is a study of a specified phase of manage- 
ment in the Student's major field of study which may be se- 
lected by him or assigned by the instructor. 

At the first session of the class the problem of selecting a 
subject for research should be thoroughly discussed by the 
instructor, who at the end of the period assigns Chapter I for 
study prior to and discussion at the second class meeting, re- 
questing each student to prepare a bibliography of manage- 
ment books and relevant data on his potential topic {see page 

*73). . , . . 

The second session of the group is a regular seminar in 

which each student takes part in a discussion of the principles 
and philosophy of management. Such a discussion will un- 
doubtedly present many problems which may be selected or 
assigned as research topics. Chapters four, five, six and seven, 
and Appendix A offer a wide choice of topic subjects. 

At either the fourth or fifth session of the class the instructor 
discusses clearly and definitely the technique of research, and 
how to conduct scientific research. (Chapter 3.) 




By this time each student will have selected his topic and is 
ready to proceed with preliminary material so that he may be 
able to prepare a tentative outline (see page 44 and Appendix 
D), which will be given to the instructor for examination 
and later presented for class discussion. 

The major part of the research should be completed by the 
third week of the second term, at which time a final outline 
should be prepared and submitted to the instructor for his 

Writing the research findings is the next step (see Chapter 
8). At the appropriate time the instructor should discuss the 
scholarly method for writing the thesis. Thesis chapters should 
be written consecutively and each submitted to the instructor 
when completed so that it can be examined and, if desirable, 
presented for class discussion. 

The instructor, with the individual thesis outline before 
him, and a completed chapter, is in a position to judge the 
value of the material presented. He accepts or rejects the work. 
Where the work is not up to standard, he is able to guide a 
student in his undertaking. This method seems better than 
permitting a student to complete the thesis without proper 
guidance, only to find it unsatisfactory at the end of the 
academic year. 

Table of Contents 

Chapter P<*Z e 

1 Nature 

of Business Management i 
The science of management, levels of management, 
types of management control, duties of management, 
responsibilities of management, principles of manage- 
ment, bases for managerial decisions, instruments of 
management, appraisal of executive control, managerial 

2 Scope of Research 2 3 
Brief history of development, growth of industrial re- 
search, definition of research, types of research, appli- 
cation of industrial research, factors of industrial 
research, objectives of industrial research. 

3 The Technique 
and Technicians 

of Research 4° 
The scientific method, defining the problem, analyzing 
the problem, collecting facts, classifying facts, analysis 
and interpretation of data, compiling conclusions, 
components of business research, research personnel, 
research costs, accounting procedure for research. 

4 Organization of Research 5 5 
Executive needs for factual information, research on 
financing, research on organization, fundamentals of 
business activity, principles of organization, executive 
qualifications, legal forms of organization, organiza- 


The Mature 

of Business Management 

The Science of Management. Business management, ap- 
proached as a science, must be based upon the fundamental / 
definitions governing science. It must consist of "knowledge / 
gained and verified by exact observation and correct thinking, 
which is methodically formulated and arranged in a rational 
system." In other words, it must constitute a "department of 
knowledge in which the results of investigation have been 
worked out and systematized." 

From the beginning of the 20th Century there has been a 
steady evolution of thought on the subject of management. 
•Once regarded as an "art," it has come more and more to be 
accepted as a potential "science," born of theory but tested 
and appraised by research and experience. One of manage- 
ment's outstanding proponents, the late Dr. Frederick Wins- 
low Taylor, a business consultant of unequalled ability, held 
this view. 

It was he who formulated the four basic principles of man- 
agement, 1 still standard today. / 

The application of these fundamentals requires research, / 
penetrative thinking, decision, specialized knowledge, skill, 
and continuous, exacting effort. As facts and principles are 
developed by those who spend their lives practicing, studying, 

1 The Taylor Society, Scientific Management in American Industry 
(Harper and Brothers, Publishers, New York and London, 1929) pp. 8-9. 



and teaching management, it appears reasonable to assume that 
a sufficient body of knowledge will be accumulated and or- 
ganized to place management with the applied sciences. 

Definition of Management. Business management, like all 
other sciences, must be studied and practiced essentially on 
the basis of its own laws and principles. It is best defined as 
the technology of determining, planning, directing, control- 
ling, and measuring the use and effectiveness of the human 
and physical resources required to accomplish a definite ob- 
jective in management. 


Top Management. Many contemporaries write of manage- 
ment as operating on different levels within an organization. 
For example, they use the terminology top management to 
represent certain offices, such as the presidency of a corpora- 
tion. This terminology, however, has not come into wide 
usage in industry because there seems to be no clear lines of 
demarcation between the various so-called levels. 

Of course there are levels of authority and responsibility 
in business management but it seems more appropriate to 
classify these management levels according to the nature of 
the work involved rather than by offices. 

Management embraces three levels of direction, based pri- 
marily on delegated authority and responsibility consistent 
with the type and nature of the duties to be performed. These 
levels are usually described as administrative, executive, and 

Administrative Level. Those on the administrative level 
determine the broad planning and policies; they are responsible 
for the measurement of overall results, direction, and leader- 
ship of the business as a whole. This level is comparable to 
so-called top management. The chief administrative officer is 
the president of the corporation. The board of directors, 
known as the administrative group, is responsible to the stock- 
holders for the wise administration and trusteeship of the 



enterprise. The president is customarily a member of the board 
of directors. 

Executive Level. On the executive level of management 
are those with authority for carrying out, or executing, the 
plans, policies, and decisions of the administrative level. The 
chief executive of a corporation is ordinarily given the title 
of general manager and executive vice president; he is the chief 
line officer in charge of operations. 

In business management, a line officer is an executive who 
is responsible for conducting, or carrying on, the actual pro- 
duction operations and thus has "line control" over the 
operating departments, divisions, and units of the enterprise. 


Line control. Line control is the exercise of authority over 
operating activities of an organization, a department, or a 
unit. A line officer is responsible for all the activities of his 
organization or unit. 

Functional Control. Functional control is the exercise of 
authority over prescribing methodology for the performance 
of required functional services, or elements, wherever such 
functions, or elements, are located within the organization. 
The functional officer is responsible for the procedure of one 
activity in all departments of the enterprise. The purpose of 
functional control is to standardize procedure and enhance 

Two Types of Controls Contrasted. An example of the 
contrast between these two types of controls is the comp- 
troller. In this case the comptroller has functional control over 
all plant records, while the plant manager exercises line con- 
trol over the personnel and activities of the production, or 
manufacturing department. 

Line authority follows the "chain of command" from the 
administrative level to the individual worker. Functional au- 
thority is vested in the executive responsible for the super- 

1 See Principle of Control, page 10. 



vision and control of a service activity by virtue of being 
head of and having superior knowledge of that activity. Func- 
tional control relates to procedure, while line control relates 
to personnel. 

The general manager, in conjunction with the administra- 
tion, usually selects major executives, or heads of the various 
departments of the business and delegates to them the authority 
and responsibility for the successful operation of their re- 
spective activities. 

The Advisory Level. The advisory level of management, 
known as staff, gives advice in specialized fields to administra- 
tors and executives who require such information for the per- 
formance of their duties. As a general rule the head of a staff 
department or division is not a line officer of a company and 
therefore does not have command authority except within 
the confines of his own unit. 

A business staff may be compared with the general staff 
of an army, corps, or division. The staff officer in the military 
organization is merely an adviser to the commanding general 
in certain highly specialized activities. Thus, he is not in line 
to succeed to a command. However, in civilian terms, "staff" 
also is applied to a group of assistants of a superintendent, 
such as the staff of a hospital. 

Integration of Management Levels. The duties which 
belong to the administrative level of management differ in 
degree and kind from those which constitute the scope of the 
executive or staff levels. The administrator plans and plots 
the course of the business. The executive, with the aid of the 
staff officers, carries out administrative plans. The three levels 
of management are complementary in nature although entirely 
different in character of performance. They require different 
skills, qualities, and types of knowledge to cope with the di- 
vergent duties inherent in these interdependent levels. Staff 
management is the encyclopedia of administrative and execu- 
tive management. Of course, the administrative level does 
perform a certain amount of execution, and executive re- 
sponsibility requires varying degrees of administration. This 



is illustrated by means of a rectangle, bisected diagonally, 
forming two right-angle triangles. One triangle represents 
administration and the other, execution, with horizontal lines 
delineating levels of authority. The area represented by the 
broken-line lozenge denotes staff activity. 

Bollf t l Director 

■ 'c 

o — - » 





<^ Major Executives ^> 



^X^^ Supervisors 



'< ^ " 

\ Foremen 


Relationship of Administration, Execution, and Staff to 
Levels of Management 


The predominant duties of all business administrators are 
to operate at a profit and maintain economic security for the 
concern which they represent. Economic security in business 
is the culmination of managerial research, keen, long-term 
planning, wise decisions, shrewd direction, and the application 
of science to management. Thus, the result of economic 
security is progress. 

Progress may call for new products and new services to 
satisfy the ever-changing economic wants of man. 

The essentials of good management are an understanding of 
economics, thorough knowledge of the duties and responsi- 
bilities of an administrator, sound organization structure, unity 
of purpose within the organization, wisely selected business 
policies, long-term planning, consistent leadership, an under- 
standing of the human factors in industrial relations, compre- 
hension of labor-union relations and problems, uniformity of 
procedure, accurate decisions, definite control, and constant 
measurement of operations. Poor management results from 
failure to recognize these essentials and to understand the 



following fundamental economic principles which govern 


The basic principles of industrial economics are (i) di- 
vision of labor, which simply means the separation of 
manual effort from mental effort, such as planning; (2) 
transfer of skill, which refers to the transfer of the worker's 
skill to the machine, permitting the worker to devote his 
energy to quality and quantity production; (3) specializa- 
tion of effort, which means that each worker specializes 
in a definite trade or specific line of work; (4) co-operation 
between management and worker, which tends to relieve 
industrial strife; (5) unit cost decreases as quantity in- 
creases to the point where the law of diminishing returns 
becomes effective. In other words, the unit cost of a product 
becomes less as the volume of units increases until such time 
as further investment is required for additional equipment, 
tools, or building expansion; and (6) the systematic use of 
recorded experience, which means the maintenance and use 
of adequate, accurate, and current records. Decisions are usu- 
ally made from recorded information. Management as a poten- 
tial science co-ordinates and directs all the physical and human 
resources at its disposal, along lines governed by and consistent 
with the principles of economics. The application of business 
management is the practice of sound economics. 


The responsibilities of management are both humanistic and 
materialistic. Management is responsible to labor for a fair 
standard of living, and to the owners of the business for carry- 
ing out their policies in the best and most economical manner. 
Management is responsible for achieving the objective for 
which it exists, the operation of a business enterprise at a 



The Federated American Engineering Societies of New 
York have authoritatively listed the responsibilities of man- 
agement as follows: 

1. To establish sound business policies 

2. To finance the enterprise 

3. To control the expenditure of funds 

4. To develop an organization whose functions are logically 
assigned to competent individuals 

5. To design, test, improve, and warrant a product which 
is to be distributed in relation to demand and competi- 

6. To build or secure plant and equipment and utilize them 
economically and effectively 

7. To procure adequate supplies of proper materials 

8. To maintain a suitable supply of labor and supervise and 
co-ordinate its effort 

9. To organize and sustain proper relationships between 
owners and workers 

10. To formulate procedure based upon practical and eco- 
nomical methods 

1 1 . To manufacture and sell at a profit 

These managerial responsibilities are common to most forms 
of business activity and are accepted as essentials by the ma- 
jority of our industrial leaders. 

Every one of these responsibilities will be more feasible, 
more efficient, and more profitable if its implementation is 
based on scientific research. 

Foresight is industry's most potent asset. To be able to look 
ahead with accuracy is the final measure of skilled manage- 
ment. An alert management establishes and utilizes the fa- 
cilities of operational or managerial research before attempting 
to carry out these dominant responsibilities of management. 
In Chapters IV, V, VI, and VII these responsibilities are set 
forth in terms of operational-research projects to guide a 
business executive or student in attacking the problem of 
executing each responsibility. 

With the basic principles of industrial economics as the key- 



stone, research has made it possible to define clearly the re- 
sponsibilities of management and to develop principles for the 
administration of an enterprise. 


The word principle means "foundation, beginning, or fun- 
damental truth." A principle, as applied to business manage- 
ment, is an essential, fundamental to the universal application 
of science to the practice of management. These management 
principles are: 

1. Principle of preparation 

2. Principle of initiation 

3. Principle of planning 

4. Principle of performance 

5. Principle of control 

6. Principle of measurement 

1. The Principle of Preparation. The successful inaugu- 
ration of a business enterprise must be premised upon the 
thorough analysis of all essential factors characteristic of the 
type of enterprise under consideration. Such analysis must not 
only include the bases for sound initial steps, but must take 
into consideration the ultimate goal for which the business is 
established. The principle of preparation cautions that learn- 
ing by trial and error— costly and often disastrous— in a new 
undertaking can be reduced to a minimum when the pre- 
liminary thinking, which precedes the establishing of an 
enterprise, has been well and carefully performed. Wisdom 
before "the die is cast" is an excellent guarantee of success. 

Preparedness calls for a comprehensive study of the pro- 
posed enterprise and of the human and physical resources 
which it will require. Scientific research is the only dependable 
guide to the course which a business must pursue. 

2. The Principle of Initiation. The principle of initiation 
must be applied, when the enterprisers are satisfied with the 



results of the application of the principle of preparation or 
analysis, and have determined the course of the proposed 
venture through a thorough knowledge of the objective of 
the enterprise. This principle is summarized as follows: Sound 
business policies must be -formulated, established, made effec- 
tive, and measured against proper criteria before initiating 
business operations. Sound business policies 1 form a firm 
foundation upon which to build an enterprise and aid ma- 
terially in keeping it moving forward in the most advantageous 
direction. They provide a basis for unification of business 
activities, tend to reduce the dependence of an organization 
on any individual, and are fundamental to operational plan- 
ning and managerial control. Extensive and intensive manage- 
ment research is required to formulate sound, adequate 
business policies. 

3. The Principle of Planning. Accurate planning, based 
on research, reduces mental and physical activity to the eco- 
nomic minimum and increases the effectiveness of supervision, 
direction, and control. Planning follows research but precedes 
action. Efficient planning results from accurate and thorough 
research, as no plan of procedure can be formulated without 
an understanding of the job to be performed. The successful 
achievement of the business objective is accomplished by 
scientifically determining, co-ordinating, and economically 
utilizing the required resources, the necessary time span, suit- 
able procedures, and adequate means of production. 

The Organization Structure. Scientific planning for eco- 
nomic activity includes the development of an organization 
structure, properly balanced, co-ordinated, and controlled. 
Thus, organization is basic to accurate planning. To organize 
is a function of management. Scientific planning is basic to 
adequate control, and vested authority is the foundation of 

4. The Principle of Performance. Successful and eco- 
nomical performance of any activity is predicated upon the 
thorough analysis of that activity and the preparation of defi- 

1 See page 14 for a discussion of business policies. 



nite plans for its accomplishment. The effective performance 
of any type of work depends upon the extent and complete- 
ness of the plans prepared to accomplish that work. Mana- 
gerial planning, based on research, is the foundation of 
operational activity. 

An analysis of proposed activity should include determina- 
tion of its purpose, the most economical way to execute the 
activity, the place where the activity can be carried out most 
advantageously from the standpoint of investment in labor 
and capital, and time required to perform the activity ade- 
quately, accurately, and economically. 

5. The Principle of Control. The effectiveness of control 
is directly proportional to the accuracy of planning, the effi- 
ciency of operations, the perfection of standards, the thorough- 
ness of measurement, and skill of supervision applied to human 
and physical resources in relationship to quantity, quality, 
time and place. Management control is the human activity 
which devises and utilizes the determinants that set the pace, 
govern progress, produce unity of action, promote smooth- 
ness in operation, and command the desired results. It is a basic 
process, procedure, or management technique involving the 
establishment of specific standards or measuring rods, against 
which activity or utilization of resources may be evaluated; 
the observation and recording of progress or activity of these 
resources; the comparison and measurement of results of oper- 
ations; and the placement of definite responsibility on those 
executives, supervisors, and workers for operational results. 

Regulation, restraint, and government of the activities of 
an enterprise are the essential means of maintaining the estab- 
lished course of action. In addition to the delegation of re- 
sponsibility and authority, the factors common to control are 
co-operation of personnel, specialization of activity, methods, 
systems, records, and standardization. All these factors must 
be recognized and utilized to the fullest extent to gain positive 
managerial control. 

Control regulates each activity of a business, both inde- 
pendently and in relation to each other activity, and makes 



effective the plans and policies of the enterprise which govern 
the immediate and the ultimate purpose. 

Management research is called upon to develop a well- 
balanced plan of control for each administrative and executive 
activity for the purpose of guiding, co-ordinating, and meas- 
uring business operations. A plan of control includes such 
factors as defining the specific objective of the plan, develop- 
ing the proper procedure to gain the desired results, assigning 
the key personnel to establish and supervise performance, de- 
termining the time required to produce effective execution, 
and defining the criteria for measuring accomplishment. 

To gain managerial control of both the human and physical 
resources requires good leadership, sound organization, and 
the wise delegation of responsibility and authority to those 
executives and supervisors who are accountable for operations 
and guidance of an enterprise. 

Span of Control. V. A. Graicunas in his writings on man- 
agement refers to what he terms "limited span of control." 
His research findings indicate that an executive should not 
have more than four or five persons reporting directly to him, 
for as the number of persons supervised increases, the relation- 
ship between the executive and those reporting to him becomes 
more complex. 

Supervision and Its Counselors. Supervision is the art 
of overseeing performance of operational activity. It holds 
production processes and procedures to the prescribed meth- 
odology; observes progress, and when necessary institutes cor- 
rective action; strives to secure the maximum results with the 
most economical use of time and capital. Supervision, with its 
two counselors direction and control, employs the former 
(direction) to chart the course of the business and to guide 
its progress by giving instructions and specifying the methods 
and procedures which must be utilized to acquire the desired 
results. The latter counselor (control) forecasts results, de- 
vises control mechanisms, collects and records information, 
establishes performance standards and provides the media for 
measuring the accuracy and efficiency of results. 



6. The Principle of Measurement. The accuracy of evalu- 
ating performance, progress, and improvement of activity is 
in direct relationship to the nature of the measuring criteria 
and the efficiency of the human element conducting the ap- 
praisal. Constant measurement of progress and of individual 
and group activity must be made to provide a sound basis for 
the adjustment of plans, policies, and controls to meet changing 
requirements. Among the managerial instruments of measure- 
ment in business are accounting, standards, budgets, and rec- 
ords. All business activity should be measured qualitatively 
and quantitatively. Standards furnish reliable guides as to 
methods and practice and provide yardsticks by which the 
specific quality, quantity, performance, and result of any ac- 
tivity, policy operation, human or machine, may be measured 
definitely and compared with past experience or with a pre- 
determined standard unit. 

Fundamentals of Measurement. All forms of measure- 
ment consist of four fundamentals: (i) defining the 
characteristic to be evaluated, (2) prescribing the applicable 
standard or criterion, (3) designating the unit or units in 
which the appraisal will be effective, and (4) providing accu- 
rate means for comparing a characteristic with the specific 

Because of the practical soundness of these six principles of 
management they have been accepted by business executives 
as underlying the structure and philosophy of modern in- 


Bases for Decision. Decision is the choice of alternatives, 
based on judgment. Sure and exact decision is the greatest 
factor in putting these principles into profitable action. In 
order to be effective, decision must be based on facts and 
conclusions arrived at by the scientific method, as follows: 

(1) determination of the problem, its scope and limits; 

(2) determination of the elements of the problem; 



(3) collection of facts relating to the problem; 

(4) arrangement and classification of facts; 

(5) analysis of the classified facts, and 

(6) interpretation of and induction from these facts of a 
conclusion or conclusions. Conclusions must be verified. 

The application of the scientific method, within the capa- 
bilities of the individual employing it, insures intelligent con- 
sideration of the entire problem and all elements affecting its 
solution and provides a proper basis for a wise decision which 
will coincide with the tenets of the policies of the enterprise. 


The development of managerial methods, techniques, and 
practices is necessary to give effect to and make possible the 
full utilization of the principles of management. These methods 
and techniques must provide for collection of all information 
pertaining to transactions of the business so that the exact 
status of both the human and physical resources may be deter- 
mined at any given time or for any selected period. Manage- 
ment methods should also include means for determining the 
need for shifting the emphasis from one business activity to 
another so as to operate in sympathy with varying economic 
trends. A prerequisite to the effective utilization of managerial 
time is the development of supplementary aids or instruments 
which relieve managerial personnel of detail and thus allow 
them to concentrate attention upon the functions of planning, 
directing, and controlling. In other words, these instruments 
permit the managers to make the principles of management 
effective. The following are included among the control and 
measuring instruments of management: 

1 . Policies 

2. Charts and Manuals 

3. Standards 

4. Systems 

5. Records and Reports 



6. Accounting 

7. Budgets 

8. Written instructions 

1. Policies. A business policy is "an accepted law of guid- 
ance for each phase of business activity, through which unity 
of purpose and co-ordination of control are accomplished." 
Concerted action through control requires a co-ordinating in- 
strument to regulate and bind together the several independent 
parts or functions of a business. It is the duty of management 
to formulate sound business policies, which will serve as di- 
rectives and controls. Policies are developed as the result of 
study and analysis of the purpose of the enterprise and are 
signposts along the road of business progress. A policy is the 
fundamental upon which methods and procedures are formu- 
lated. Policies not only serve to guide the course of the business, 
but provide the creative and constructive elements required 
to give it permanence, balance, and success. Each activity of 
a business may call for a separate policy, conforming to the 
general policies. The smooth interlocking of these policies 
provides co-ordination of control and the specific means for, 
direction of functions. 

Types of Policies. Business policies are classified according 
to type, based on functional division of responsibility in the 
enterprise. General administrative and departmental super- 
visory responsibilities, in terms of policies, are popularly classi- 
fied as general and operational policies. 

a. General Policies. The owners of a business or their duly 
appointed representatives, such as a board of directors, are 
responsible for formulating general policies. These policies, 
necessarily, must be wide in scope and broad in application; 
and at the same time they must delineate the ideals and pur- 
pose of the enterprise. General policies should not, however, 
be confused with the company's charter or bylaws, which set 
forth in legal form its field of operations, certain obligations 
which it assumes, and restrictions and limitations imposed 
upon its operation. 



b. Operational Policies. Based primarily on general policies, 
operational policies represent a more concrete departmental- 
ized expression of the purpose and plan of the business. In 
most concerns the formulation of these policies is entrusted 
to the major executives and officers of administration, exclusive 
of the board of directors. Operational policies may be sub- 
divided into two distinct classifications: external, dealing with 
matters concerning the public and government, and internal, 
dealing with matters relevant to departmental operations. 

Policy Analysis. A complete series of policies covering all 
matters subject to policy determination is one of the essentials 
for the success of an enterprise. The policies must be put to 
the test of day-to-day operations; and their soundness must 
be established before they are finally adopted. Once accepted, 
they must be enforced. The ever-changing economic condi- 
tions and variables within a business make constant adjustment 
of policies necessary; periodic analyses are required to insure 
their current effectiveness. If policies are to serve their desig- 
nated purpose, they must be maintained as living and vital 

2. Charts and Manuals. Organization charts provide man- 
agement with a visual picture of the organization structure. 
They show the lines of delegated authority and responsibility 
and portray the functional divisions of activity. Such charts are 
valuable in planning changes in organization, formulating 
policies, evaluating personnel, and in placing before each ex- 
ecutive, or supervisor, his field of activity, in a clear and 
definite manner. Detailed organization charts showing depart- 
mental activities are highly important in visualizing inter- 
relationships as well as the nature of the work performed 
within each unit. 

Control charts include the progress chart, which is a graphic 
representation of the progress made in one business activity 
or the activities of the business as a whole; and the process 
chart, which is a graphic representation in logical sequence of 
the events or steps in a given process or activity, showing the 
relationship of the elements involved. These charts are used 



by management as instruments of control and a means for 
measuring efficiency of operations. See Organization Chart, 
page 66. 

The organization manual describes clearly the organization 
structure, the functions of each unit within the structure, and 
interrelation of units. 

The procedure manual describes the economical procedure 
desired to accomplish efficiently the work of each organiza- 
tion unit. A new employee may prepare himself to perform 
the work in a specified department by reading and under- 
standing this manual. 

The policy manual sets forth the policies of the company. 

Simplification. Simplification, applied to management, is 
the process of reducing variety to an absolute workable mini- 
mum, usually improving quality and reducing costs. Simplifi- 
cation pertaining to personnel, products, equipment, and 
printed forms proves profitable to business concerns. 

3. A management standard is a scientifically determined 
criterion against which accomplishment can be measured. 

4. System is planned procedure, the use of which makes 
work a routine. 

5. Records and Reports. Practically all managerial deci- 
sions are based on the information contained in some type of 
record. The word record is defined as the reduction of evi- 
dence to writing, to perpetuate a knowledge of acts or events. 
A record to be satisfactory must be accurate, adequate, and 

A report is a written statement of research results, events, 
quantity, quality, conditions, and progress of activities. The 
work of the business executive is largely a matter of decision 
in connection with business problems, planning activity, di- 
recting operations, and controlling the enterprise. These 
factors, to be carried out intelligently, must be based upon 
accurate and adequate information, which is usually contained 
in executive reports. The formulation and execution of busi- 
ness policies have their origin in reports; and planned activity 
is checked through the medium of reports. An accurate, de- 



tailed record of business performance is the basis for measur- 
ing accomplishment. 

6. Accounting. Accounting is the science of recording and 
analyzing business transactions in terms of dollars or quan- 
tities in such a manner that a clear, concise, and accurate state- 
ment of the current position of the enterprise at any given time 
may be ascertained. Accounting is a tool of management 
through which many standards may be established, the effi- 
ciency of the business determined and the results of opera- 
tions measured. It forms a basis for preplanning the course of 
the business progress. 

7. Budgets. A business budget is a written estimate of ex- 
pected income, costs, expenses, materials, and personnel in- 
tended to enable management to plan for future activity so 
that profit and service objectives may be realized. It is used 
by administrators and executives to establish production re- 
quirements, control operations, and determine probable profit 
or loss in advance. Supervisors must control their respective 
activities in conformity with budgetary expectations. 

8. Written Instructions. Instructions from management 
should be clearly and completely given in writing so that no 
misunderstanding of the contents by the person receiving the 
instructions is possible. 


Management research may be initiated in the field of execu- 
tive control by procuring answers to such questions as are 
listed below: 

1. (a) Are executives making the most effective use of con- 
trol technique, i.e., are they establishing practical 
standards or yardsticks, requiring measurement and 
reporting of performance, and initiating corrective 

(b) Does the control procedure serve to spotlight condi- 
tions requiring action in time for such action to be 



2. Is the accounting system designed to furnish significant 
control information both by functions and by depart- 

3. Is current and reliable cost information available on 
individual products or services, processes, customers, 
and localities? 

4. Is there a reliable and accurate system of expense dis- 
tribution, by departments and items of expense? 

5. (a) Does the company operate under an adequate system 

of budgetary control? 

(b) Are budget allowances and classifications designed 
to reflect individual executive responsibilities? 

(c) Is there provision for frequent comparison of budget 
allowance with actual performance? 

6. (a) Have steps been taken to develop or to reinstill a 

spirit of cost consciousness throughout the enterprise 
so that each action will be weighed in terms of costs 

(b) r Do executives and supervisors hold regular meetings 
to discuss cost analysis and results? 

(c) Are all cost variations analyzed? 

7. Have control reports and records been examined and 
appraised from the standpoint of 

(a) the value, adequacy, and timeliness of the informa- 
tion furnished? 

(b) from the standpoint of economy of executive time? 

(c) from the standpoint of cost of preparation? 

(d) Is this appraisal constantly rechecked? 

8. (a) Have adequate provisions been made for informing 

executives and supervisory personnel on company 

(b) Is there proper control over policies? 

9. (a) Are all executives required to plan the activities for 

their respective units well in advance? 
(b) Are these operating plans approved by the proper 

10. Do executives appraise their personnel at regular 

11. (a) Does the company have a reliable set of executive 

, control charts? 



(b) Are these control charts kept current? 

(c) Are control boards used by plant executives? 

12. Has there been established an executive committee to 
discuss current business problems? 

13. Has provision been made for keeping members of 
administrative and executive management informed on 
current business conditions with respect to 

(a) general economic aspects? 

(b) with respect to economic conditions in a particular 

14. Is some one directly responsible for assembling and inter- 
preting basic data of this nature for the information and 
guidance of operating and policy-forming executives? 

15. Has provision been made for assembling publications 
and other reference material along management lines? 

16. Are current periodicals, trade magazines, etc., systemat- 
ically routed to those interested? 

17. (a) Is there a company library? 

(b) Is there provision for reading, indexing, abstracting, 
or clipping items of possible interest for future 

18. Does the control system include preparing plans, pre- 
scribing methodology, issuing orders, providing means 
of accomplishment, and defining procedure of measure- 

19. Is there administrative control over organization struc- 
ture to prevent duplication of effort and keep the 
structure in balance? 


1. Is there provision for company executives to get advice 
on legal aspects of day-to-day decisions they must make? 

2. Are all contracts examined by an attorney before being 

3. Are one or more people in the organization specifically 
charged with responsibility for keeping informed on new 
statutes and legislative developments-Federal, state, and 
local— as well as new regulations, interpretations, etc. of 
governmental agencies? 



4. (a) Is there some provision for the dissemination of in- 

formation on such legislative and regulatory matters 
throughout the country? 
(b) Is it some one's job to see that laws and regulations 
are uniformly interpreted and complied with? 

5. Does the company maintain membership in an appro- 
priate trade association or management group that might 
serve to keep executives in touch with current develop- 
ments, both generally and in specific fields? 


The New York Times in an analysis of a three-year survey 
on business failures, found that a total of about 60 per cent 
of new enterprises failed for the following reasons: 

1. Lack of capital, 32 per cent 

2. Lack of capacity, 30 per cent 

3. Lack of character, 2 per cent 

4. For external causes, 36 per cent 

This places the responsibility for 64 per cent ( 1, 2, 3 of above) 
of these failures on the shoulders of management. 

Inefficient Management. Inefficient management is directly 
responsible for the majority of business failures. This ineffi- 
ciency may be traced to one or more of the following factors: 

1. Failure to analyze properly the business problem at the 
inception of the business 

2. Lack of managerial ability, education, and experience 

3. Lack of, or poor, business policies 

4. Inefficient financial plan 

5. Dishonesty 

6. Extravagance 

7. Unwarranted expansion of facilities and products or 

8. Unwise policies in regard to profits and dividends 

9. Lack of business records 

10. Unwise use and extension of credit 

1 1 . Speculation 

12. Adverse personal and domestic conditions 



The majority of these causes of inefficiency appear to be the 
result of a lack of research on the part of management. 

Other Causes of Business Failures. The Times article 
goes on to state that the major causes for business failures 
which cannot be traced directly to management are: 

1. The depression period in the business cycle 

2. Adverse legislation 

3. A new product or service placed on the market which 
renders the present one obsolete 

4. A cessation of demand for the product or service 

5. Competition too keen 

6. Adverse tariff, or change in tariff laws 

7. Strikes 

8. Economic boycotts 

9. Acts of God (so-called), i.e., fire, flood, storm, war. 

Each of these factors, individually or collectively, can 
cause industrial disaster. Management must be always on 
guard to circumvent the forces of failure. 


Managerial Ability. The four fundamentals of our indus- 
trial production are management, capital, labor, and research, 
each of which is essential to the successful conduct of business. 
It can be conceived that it is possible to operate a business with 
capital and labor under inefficient management without a def- 
inite research program and make a profit, provided there is 
little or no competition, but such a condition as no competi- 
tion seldom exists in the American economy. As a general rule, 
competition is the essence of a free economy. Capital and 
skilled labor are usually plentiful, but competent management 
is the scarce fundamental in any economy. Management is 
the guiding and controlling force required to plan and co- 
ordinate production and sales in order to satisfy public de- 
mands and operate the enterprise at a profit in a competitive 



Training Managers. Today a great number of our indus- 
trial concerns are looking for men with managerial ability, 
either to train them for executive positions, or to place them in 
managerial vacancies within their organizations. It is difficult, 
if not impossible, to measure managerial ability except by 
performance and results in the actual operation of an enter- 
prise. Native ability is a God-given asset bestowed upon a rela- 
tive few, but it is imperative that those who have it be given 
the opportunity to develop it through practical application. 
There have been great minds at work in the field of manage- 
ment in the past fifty years, building the great industries of 
our country. These men knew management and its principles. 
They selected as executives men of proven ability, ambition, 
and initiative and trained them in the application of managerial 
and research principles. America owes much of her outstand- 
ing industrial position to these men. 

It is an obligation of management to select persons of 
ability, education, and experience and to train them along 
executive lines so as to build an able group of "freshmen" of 
industry, potentially ready to assume the senior burdens of 

Scientific Management. There has been a tendency on the 
part of management to apply the term scientific management 
to some distinctly unscientific procedures. Having applied it, 
some managers assume with false confidence that what is 
conducted under that title will automatically act as a cure-all 
for industrial ills. The term scientific management is hollow 
unless backed or substantiated by truly scientific performance. 
While no one today can make a final pronouncement on the 
value of scientific management, its potentialities are becoming 
steadily more apparent. 


The Scope of Research 


Labor Is Saved. Research as one thinks of it today seems 
to be comparatively new, but history shows otherwise. 
Throughout the ages man has progressed by his insistent desire 
to unlock the unknown. A familiar example is the progress of 
transportation. First, man had only his own two feet and his 
own burden-bearing strength as means of conveyance. But 
soon ingenuity— and research— gave him the labor-saving idea 
of dragging or sledding his load. Then came the use of animals 
in transportation. The discovery of the wheel introduced the 
two-wheeled chariot, the army tank of yesterday, and the 
four-wheeled coach, parent of today's wheeled wonders of 
road and rail. 

Mobility Is Increased. Similarly, transportation by water 
has passed through various stages; the free-floating log, the 
raft, the hollowed log or dugout, the sailing vessel, and on 
to the giant steel ocean liners of this era. The now taken- 
for-granted ease of mobility by land, sea, and air which we 
enjoy is but one of the great gifts which research has given 
to man. 

Research as a science existed in many fields thousands of 
years ago. The pyramids and the sphinx stand today as mighty 
monuments to the power of tireless research. 

2 3 



Research in Chemistry. All subsequent civilization has 
profited from the social, philosophical, and scientific research 
of the Greeks and Romans. 

To many people the words chemistry and research are 
synonymous. The origin of this association of ideas dates back 
to the eighteenth and nineteenth centuries when such scientists 
as Davy, Bacon, Lavoisier, Priestley, Fischer, and Pasteur made 
great strides in research which have added beneficially to 
present-day living. Today chemical research is credited with 
the origin and growth of numerous industries, such as plastics, 
rubber products, and petroleum. 

Although chemistry utilizes scientific research for mighty 
purposes, other fields, too, take their places as focal points 
for research. 

Early research was entrusted to the individual inventor, who 
buried himself in his basement or garret laboratory and devel- 
oped many basic products of today. Of such men were Eli 
Whitney, Robert Fulton, Alexander Graham Bell, Wilbur and 
Orville Wright, and Thomas A. Edison, to name but a few of 
the many research men of America whose inventions have 
given us our present high standard of living. 


Beginning early in the nineteenth century, the industrial 
machine was created by research, and now research has been 
adopted as industry's pathfinder of progress. The individual 
inventor has been overshadowed by organized laboratories of 
industry, resulting in the superior status of industrial research 

Organized research and war have been inseparably allied 
since the dawn of time. Man in his struggle for existence has 
never ceased his search for the most powerful force with 
which to defeat an enemy. Research carries the burden of 
his quest. At the end of the Civil War, President Lincoln 
founded the National Academy of Sciences, which was a move 
to secure the collective aid of the scientific minds of his day. 



Following the war with Spain in 1898, industry proclaimed 
its recognition of research by establishing its own laboratories. 
This trend was further accelerated at the termination of the 
First World War. At the conclusion of the recent war, re- 
search assumed an even greater position in industry. The auto- 
mobile and airplane came into wide general use chiefly as the 
result of war-necessitated research. It was war which released 
to the world atomic energy with its unlimited horizons, and 
radar, "the eyes of limitless space." President Franklin D. 
Roosevelt once said, "Industrial research is one of the greatest 
resources in the arsenal of democracy." 

The great universities have always proved to be one of the 
most reliable sources of research, regardless of the field. In 
its process of accumulating new knowledge, the university 
conducts fundamental research in many fields. 


Classification of Research Laboratory Personnel 
a. Distribution of Research Laboratory Personnel 

Chemists 21,095 

Biologists 1,657 

Engineers 20,637 

Medical doctors 236 

Physicists 2,660 

Metallurgists 2,364 

Psychologists 22 

Geologists 81 

Unclassified 5,567 

Total 54*3 10 

b. Other Technical Personnel 35>53 6 

c. Administrative Personnel 44,6 3 1 

Total i34>4 86 

Growth of Industrial Research. Since the Second World 
War research has been predominantly industrial. It answers 
for industry such questions as: "What happens if this is tried? " 



or, "How can this product or service be improved?" or, 
"What else can we use this material for?" or, "Can this waste 
material be used for something profitable?" 

Organized industrial research started about fifty years ago. 
Only 297 industrial research laboratories were listed in the 
United States in 1920. In comparison, the 1946 edition of the 
National Resources Council lists 2,443 industrial research 
laboratories with personnel classified as shown in Table i. 1 

The Behavior of Research. This vast growth of research 
cannot be attributed to any single reason, but is due to a 
number of different factors. The greatest of these seems to be 
the catalytic behavior of research itself. Once started, the re- 
sults of industrial research accelerate as the mass of scientific 
knowledge accumulates. 

Trained Personnel. A second factor is the increasing num- 
ber of scientifically trained personnel due to the greater avail- 
ability of college education. The improved educational 
system has increased not only the number of scientists but 
also the recording of scientific knowledge. This, in turn, has 
resulted in more published information, collected in more and 
larger technical libraries, where the knowledge acquired be- 
comes the starting point for further quests. 

The United States Patent System. A third factor is the 
protection which the United States Patent system provides: 
"The Congress shall have power ... to promote the progress 
of science and useful arts, by securing for limited times to 
authors and inventors the exclusive right to their writings and 
discoveries." 2 This protection acts as the stimulant, often 
necessary, to persuade industry to invest funds in research 
projects. As of December 31, 1946, under this power the 
United States Patent Office had issued 2,413,674 patents. Rec- 
ords of the Patent Office show that the percentage of patents 
assigned annually to corporations has increased from about 
28 per cent in 192 1 to nearly 60 per cent in 1946. This in- 

1 Industrial Research Laboratories of the United States, 8th edition, Na- 
tional Research Council, National Academy of Sciences, Washington, 1946. 

2 Constitution of the United States, Article I, Section 8, clause 8. 



crease has occurred over the same span of years and at ap- 
proximately the same rate as the growth of the industrial 
research laboratories. The patent system serves as a glass bar- 
rier which allows the observation of industrial advances, yet 
protects the holder of the patent against immediate infringe- 
ment by others. It has served as the necessary protection for 
the growth of several of the large industries which have arisen 
from the research laboratory. At the public hearings of the 
Temporary National Economic Committee (created by Con- 
gress in 1938), evidence was presented by Clarence C. Carlton, 
vice president of the Motor Wheel Corporation, Dr. Frank B. 
Jewett, president of the Bell Telephone Laboratories, and 
George Baekeland, vice president of the Bakelite Corporation, 
indicating that the growth of their respective industries could 
be attributed to patent protection, especially during the early 
days of research and development. 1 

Corporations Encourage Research. A fourth factor en- 
couraging the expansion of industrial research has been the 
growth of the corporate form of business. It is this flexible 
form of business which controls funds large enough to sponsor 
at one time the projects of several individuals, each possessing 
specialized knowledge. This permits research to progress in 
many directions, all co-ordinated toward a central goal, 
namely, better products for the market. 

Scientific Management. Another factor has been the ad- 
vancement of the scientific approach to industrial manage- 
ment. Actually a component of the growth of the corporate 
form of business, management has progressed from the role 
of the individual despot to the stage where management is 
vested in carefully selected executives. 

Research Benefits and Profits. The final, and probably 
the greatest, reason for the growth of industrial research is 
that it has proved itself to be a method that yields benefits to 
the public, and profits to industry. 

1 Adopted from "Record of the Temporary National Economic Commit- 
tee," passim. 




Although the greatest emphasis to date has been placed upon 
industrial research, there are other fields in which research 
plays an important part. One of these, managerial research, 
includes plant research, human research, organization research, 
policy research, and research in related fields. Other fields 
where research must be recognized are, philosophy, sociology, 
psychology, civics, and economics. 

Social Research. Social research has the same goal as in- 
dustrial research in that both are striving to make this a better 
world for mankind. Social research attempts to improve the 
organization and functioning of society rather than to attain 
the material benefits sought by industry. Industrial research 
is intended to benefit financially the business enterprise which 
institutes it. Social research does not have any material obli- 
gations to fulfill other than to benefit society as a whole. 

Remuneration in Social Research. Society of today fol- 
lows the trends that result from industrial research. The pace 
set by industrial research is one of the major factors deter- 
mining the standard of living. The remuneration ensuing 
establishes the quality of social institutions, hospitals, churches, 
schools, and other public services supported by the com- 
munity. The applications of scientific research, which provide 
more things for more people, in turn benefit the whole 

One of the reasons for the slow growth of social research 
is lack of the financial incentives which spur industrial re- 
search. Another reason for this tardiness is the difficulty of 
introducing changes in social institutions. Products may be 
changed at will, but man's habits are not easily changed. In fact, 
one of the most difficult stages in introducing a new product 
is to persuade society to give the product a trial. People for 
the most part are extremely reluctant to abandon concepts to 
which they have become accustomed. Heating experts ex- 
pound radiant heating as the most efficient type available, yet 
few people are yet willing to abandon the bulky steam or 



water radiator and its principle of convection heating, in spite 
of the fact that radiant heat was utilized by the Romans nearly 
2,000 years ago. 

An important Goal in Social Research. One of the most 
important goals of social research is an attempt to place man's 
economic status on a high level through the application of the 
scientific method. It is disruption of the economic status won 
through research that causes most economic unrest. One of 
the chief economic ills is unemployment with its resultant 
disasters. Research units, supported by government, industry, 
and labor unions, are working determinedly to find a means 
for stabilizing employment. 

Municipal Research. The problems of government are the 
subject of continuous research by appointed or elected citizens' 
committees, chambers of commerce, and municipal, state, or 
Federal bureaus. Industrial research goes hand in hand with 
municipal research in constantly supplying improved building 
materials, power equipment, and police and fire protective 
supplies; in fact, it affects innovations in nearly every product 
connected with municipal projects. A municipal research de- 
partment is frequently charged with the task of keeping the 
other departments informed of industrial improvements. 
Another task frequently assigned to the municipal research 
unit is conducting surveys to assure municipal employees of 
wages comparable to those paid in surrounding communities. 
One of the general projects assigned to municipal research 
groups is a study of the budget with the goal of locating 
savings which will eventually lower the tax rate. 

Research Related to Taxation. The general purpose of 
taxpayers' associations can be well illustrated by citing the 
Minneapolis Taxpayers' Association, which was founded in 
1924 to reduce taxes, to keep the public indebtedness "within 
bounds" and to halt wasteful and unnecessary expenditures of 
public funds. Another example is the New York Bureau of 
Municipal Research, which was founded in 1 906, and has been 
recognized as maintaining one of the leading staffs of public 
administration experts in the country. 



Research supported by the taxpayer is not limited to the 
individual community but is also statewide. Examples of this 
are the Massachusetts Federation of Taxpayers' Associations, 
founded in 1932, and the Minnesota Institute of Govern- 
mental Research, founded in 1934. 

Research units supported by the Federal government 
include those of the various branches of the Defense establish- 
ment, the Department of Agriculture, the Department of the 
Interior, the Department of Commerce, and the Department 
of Labor. These units are often able to conduct expensive 
fundamental research which many industrial laboratories can- 
not afford. The most startling example of government- 
controlled research was the development of the atomic bomb. 


Definition of Research. Research may be defined as the 

systematic examination of and experimentation with the known 
to discover the unknown. Basically, it can be thought of as 
the quest for knowledge. The field of research has proven to 
be tomorrow's source of new products, new industry, and new 
jobs. Research is the pathfinder for man's future progress. 

Types of Research. Research as applied to the sciences can 
be subdivided in many ways. However, two of the basic, yet 
most controversial, classifications are pure and applied re- 
search. These divisions are not based upon the manner or 
method of research, but rather upon the goals of such work. 

Pure Research. The aim of pure research is to seek system- 
atically for new information, facts, or laws in an unlimited 
field, with no applications in view. An example of pure re- 
search is the work conducted by the Forest Products Labora- 
tory whereby new products and uses for wood are sought. 
The research is allowed to proceed into any direction or field 
in which wood, or wood products, can be used. Research of 
this type may also be called fundamental research since it is 
really a quest for new beginnings. It has also been called 



indirect research because the goal to be achieved is not known, 
but is being pursued in an indirect manner. 

Applied Research. In contrast to pure research is the 
other extreme, known as applied or direct research, where the 
fundamentals are already known and the aim of the scientist 
is to achieve some goal directly in view. An example of this 
is the research project of improving a process already in ex- 
istence. Such research may be more in the nature of develop- 
mental research, as it can be improvement or additional study 
of work already accomplished by pure research. 

The use of these two classifications supplies the basis for 
many arguments since dividing lines are not clearly defined. 
Pure research may exist in the field of applied research, such 
as occurs in the case of a chemist seeking new vitamins. Even 
though the chemist may be working on a method for synthe- 
sizing a specific vitamin already discovered, he in the course 
of such synthetic work may uncover an entirely new factor. 
Actually, such a chemist is doing pure research, yet he may 
be classified as an applied chemist due to his search being 
restricted to the field of nutritional factors. 

The Pure Research Stage. Today's high standard of living 
is to a large extent the result of pure research on the part of 
such men as Joule, Ohm, Faraday, Galileo, Newton, Volta, 
Oersted, Hertz, Clerk-Maxwell, and Langley. Due to their 
work, we of today enjoy the benefits of the steam engine, 
electric power, telephone and telegraph, wireless, and air- 
planes. The pure research, or embryonic, stage for many of 
our present inventions took place years before production. 
D. D. T. (p,p' dichlorodiphenyltrichloroethane), the miracu- 
lous new insecticide, was actually discovered and prepared in 
the nineteenth century, yet its commercial use was not recog- 
nized until just prior to the invasion of Italy in World War II. 
However, for the most part, the time span between discovery 
and application has been continually growing shorter, as is 
illustrated by the story of penicillin, which was discovered, 
developed, tested, and put in commercial production within 



approximately five years. Streptomycin, another great anti- 
biotic, went through an even shorter period from discovery 
to development. 

High Standards of Living. If the great strides in high 
standards of living are to continue, more effort must be di- 
rected to fundamental research. This is slowly being achieved 
as the time element becomes narrower between the results of 
pure research and their direct application. Great corporations, 
such as the General Electric Company and the Bell Telephone 
Laboratories, are setting the pace which many other corpora- 
tions are gradually beginning to follow. 

The Responsibility of the University. In the past, the uni- 
versities have had to conduct most of the pure, or fundamental, 
research. Consequently, it has sometimes been described as 
academic research. Until recently, industrial-research labora- 
tories in the United States have not received the necessary 
financial approval to carry out fundamental research. This 
was due to management's reluctance to invest money in some- 
thing not immediately profitable. An exception to this has been 
the practice whereby industrial corporations have invested in 
pure research by supporting fellowships at various universities 
and institutes. As the industrial research laboratories assume 
more and more of their share of pure research, the responsi- 
bilities of the university will grow also. The industrial labora- 
tories will always be expected to conduct some of the pure 
research, but an equally great responsibility will be the teach- 
ing and training of the personnel to do the industrial research, 
both fundamental and applied. The universities will be ex- 
pected to supply an ever-increasing number of graduates to 
meet the demand of the industrial research laboratories. 

Pure and Applied Research Compared. Pure research 
cannot be efficiently carried on without financial support, and 
this support comes out of the profits derived from successfully 
applied research. On the other hand, applied research can 
only exist as long as fundamental findings are available for 
exploitation. The supply of fundamental findings must either 
be continually added to or it will eventually become exhausted. 



Pure research is charged with the discovery of these vital 
fundamentals. The pure research of today is the applied re- 
search of tomorrow. Pure research may be thought of as the 
discovery, whereas applied research is the control of the dis- 

Industrial Research. Scientists have long realized that re- 
search is the key to their profession; yet, not until recently, 
did management discover its real value. Confronted with many 
problems, scarcity of essential materials, complex production, 
constantly rising costs of materials, labor and expenses, and 
increased demand for commodities, management turned to 
research as the instrumentality for solving its many industrial 
problems. Far-sighted business administrators have now 
learned by experience that industrial research is the price of 
progress. They are convinced that the techniques and methods 
which proved profitable to the scientist can and must be 
applied to all phases of industrial activity. They agree that 
the methods used to solve problems are relatively simple and 
sound, although the magnitude of management problems varies 

Questions to Be Answered. Many intelligent industrialists 
have good cause to become uneasy about the rapid dwindling 
of natural resources. They have been forced to turn to scien- 
tific research as the one and only source which may be able 
to answer the following all important questions: (i) Are 
there new sources of supply of such basic raw materials as 
iron ore, sulphur, manganese, and oil? (2) Where are they 
located? (3) Can they be opened up to industry? (4) How 
may recovery methods for obtaining basic material be de- 
veloped or improved? (5) What economical substitutes can 
be used for scarce materials? (6) What necessary materials 
can be synthesized economically from available raw materials? 

(7) How can reclamation of materials be made economically? 

(8) How can production wastes of these basic raw materials 
be eliminated or reduced? and (9) Are there new sources of 
energy available which may be tapped economically? 

Here the scientist and industrialist must come together, pool 



their knowledge, and pursue assiduously a systematic search 
for feasible responses to these dominant inquiries. To use the 
words of the well known scientist, Dr. C. S. Kettering, "Re- 
search is finding out what we are going to do when we cannot 
continue doing what we are now doing." 


Just as the scientist and physicist conduct research to dis- 
cover new or synthetic materials, products, and equipment, so 
must management through research find new and improved 
technique and methodology for production, distribution, and 

The term research, in general use, has many implications 
and meanings. When used in, and applied to, the field of 
management it is usually confined to mean the acquiring of in- 
formation and data by scientific investigation and comparison, 
discovering, identifying and classifying facts, ascertaining 
their relations to each other and to the whole. Research in- 
cludes also the utilizing of the results (if desirable), or placing 
them in the hands of the chief executive. 

Two Major Classifications. Industrial research is divided 
into two major classifications, (i) extensive industrial re- 
search and (2) intensive industrial research. Extensive indus*- 
trial research examines fundamentals so as to accumulate 
scientific data and increase the essential information on in- 
dustrial activity with the anticipation of ultimate use in the 
development of new products, processes, or even new in- 
dustries. Intensive industrial research investigates a specific 
activity or commodity to discover its intrinsic application to 
a function, process, or product. 


The term industrial research usually means, in its broad 
sense, research as applied to industry as a whole. It includes 
management research, administrative research, production re- 



search, development research, materials research, industrial 
relations research, and marketing research. However, manage- 
ment research is the application of research technique to all 
phases and levels of management, such as administrative man- 
agement, production management, personnel management, 
financial management, and sales management. While sales 
management is a function of managerial research, market re- 
search is a responsibility of sales management. 

Management Research. In the discussion of management 
in Chapter I, emphasis was placed on levels of management. 
These levels are based on the nature of the work and manage- 
ment is composed of three major integral activities, namely, 
administration, execution, and consultation. The officers re- 
sponsible for the conduct of these functions are called upon 
to render decisions, which must, of course, be premised upon 
facts and not mere opinions. Too many failures in all walks 
of life result from snap judgment and the lack of thought. 

Types of Management Research. Research, the master of 
fact, must be readily available to each level of management 
in the form of administrative research, executive research, and 
staff research. Logically these types of management research, 
based upon nature of activity, are conducted usually by one 
centralized management research organization and not several 
small units. As a point of interest, on the door of a manage- 
ment research division of a large company the following was 
inscribed on a small card, "Unsolved solveable problems solved 

Administrative Research. In the corporate form of enter- 
prise, administrative research investigates problems and ac- 
tivities for the board of directors, its committees, and the 
president. Such problems pertain to the business as a whole, 
relations with stockholders, and with the consuming public. 
Examples of this type of research may cover investigating the 
advisability of increasing the capital of the corporation, or 
examining the problem of plant expansion as contrasted with 
rental of needed floor space, or determining the type of public 
relations program that should be adopted by the company. 



Executive Research. Executive research explores internal 
operational problems that arise in the everyday conduct of 
business. These problems originate in all departments of an 
organization and many of them must be subjected to the proc- 
ess of research. Examples of these types of problems include 
determination of the economical quantities of various materials 
to be kept on inventory. This takes into consideration invest- 
ment, availability, supply, demand, purchase cycle, production 
cycle, sales cycle, and many other salient factors; or whether 
or not certain parts should be manufactured or purchased 
from an outside vendor. 

Staff Research. Because staff management is the encyclo- 
pedic brain of both administrative and executive management 
it lives on the blood of research. The fundamental duty of staff 
management is to obtain knowledge in specific fields of busi- 
ness for those administrators and executives who require its 

Among those who represent staff management are the in- 
ternal auditor and the corporation attorney, both of whom 
normally report directly to the president. The internal auditor 
is responsible for checking physical resources with records of 
those resources and reporting his findings to the president, or 
his duly designated representative. Another important mem- 
ber of staff management is the statistician whose work is ex- 
clusively of a research nature. Examples of staff research in- 
clude the determining of the causes for differences in physical 
inventories and book figures, or developing a system of 
quality control based on the application of statistical methods. 

Fields of Management Research. Because modern in- 
dustry is founded on scientific research, management must 
seize every opportunity to apply its technique to the everyday 
problems of business. Usually a determined executive who 
gains knowledge by research detects potential components 
which may lead to discoveries of inestimable value to his 
concern, or be a contribution to scientific management. The 
whole field of management is wide open and a fertile area for 
research investigation. 



Executive Wants. A few of the current "executive wants" 
which management research has been asked to work on are: 

1. An accurate forecast of economic conditions for the next 
"x" years. 

2. A system for accurately and rapidly interpreting a finan- 
cial statement and measuring the efficiency of the results 
of operations. 

3. The development of a yardstick to measure the effective- 
ness of management at its various levels. 

4. The development of control devices which will prevent 
personal appropriation of corporation funds (Recent 
cases: Chemical Company, approximately $900,000; 
machine company approximately $700,000; electrical 
company, approximately $250,000; and a trust company 

5. The development of a system that will give management 
an instant picture of all production activities and better 
methods of production control. 

6. Standards and measuring devices for all phases of opera- 
tional activity. 

7. Analysis of policies and the development of more effec- 
tive ones. 

8. To solve the more complex problems of management. 

9. Analysis of the organization structure with the idea of 
eliminating duplication of function and eradication of 
unnecessary activity. 

Development Research. Another important member of the 
industrial research family is development research which may 
be best illustrated by the analogy of a ladder with the first 
rung representing human resources, or those technicians and 
scientists trained in the application of the scientific method 
to physical resources. The second rung represents the scientific 
method, which includes investigation, examination, and ex- 
perimentation to discover facts that may be sources of inven- 
tions and new products. The third rung is the physical 
resources, which include natural resources, machines, equip- 
ment, and laboratories. The fourth rung can be portrayed as 



the process of development, or converting the test-tube results 
of the laboratories into engineering facts and data upon which 
production activities are based. The fifth rung represents pro- 
duction, or the balanced utilization of men, engineering data, 
and raw materials and machines to manufacture marketable 
commodities. This type of research examines materials, prod- 
ucts, processes, procedures, and equipment to develop new and 
improved ideas for the betterment of these items. 


Each member of the family of industrial research plays its 
part for progress in industry by striving to attain perfection 
in accomplishing the following major objectives: 

1. To find the best materials, procedures, processes, prod- 
ucts, and services, and to anticipate and prevent difficul- 
ties in manufacturing operations. 

2. To reduce the cost of materials, operations, and services. 

3. To improve the quality of materials, operations, and 

4. To reduce operating and maintenance costs for cus- 

5. To discover new uses for existing materials, processes, 
products, and services. 

6. To develop desirable substitutes for present materials. 

7. To develop new materials, procedures, techniques, and 

8. To develop new uses for by-products and waste ma- 

9. To increase sales appeal for products. 

10. To render better technical services to customers. 

1 1 . To develop better plant-operating policies. 

12. To increase the volume of business. 

13. To amass technical information for the use of executives 
and supervisors. 

14. To contribute to the general technical knowledge in the 



It can be said that those concerns which fail to use the 
facilities of industrial research usually pay the price in later 
years. Just as industrial research is the price of progress, so is 
the lack of industrial research the price of failure. Scientific 
industrial research is the instrumentality by which an efficient 
management leads an organization under prosperous as well 
as adverse economic conditions. 


The Technique 
and Technicians 
of Research 

When the president of one of the large aeronautical con- 
cerns was asked what he would name as the factor which 
contributed most to the enormous growth of the aeronautical 
industry, his instant, one-word reply was "Research." He 
could have been speaking for all industry. This supereconomic 
world has accepted research as its foundation. 

Modern Industrial Research. Progressive management is 
a dynamic combination of research and the art of decision. 
Management which fails to install research has often paid a 
severe penalty for its negligence. When, for instance, the 
large automobile concerns decreed that royalties should be 
paid for the hitherto free use of their patented discoveries, 
the smaller automobile enterprises had to choose between 
paying profit-absorbing royalties or belatedly setting up their 
own research organizations. Over and above monetary con- 
siderations, the large automobile concerns rescinded their 
policy of granting free use to the smaller automotive com- 
panies as a spur to these companies to initiate their own re- 
search organizations and thus add to the sum total of 
automotive progress. 

^The field of modern industrial research was born with the 
advent of the industrial revolution about the middle of the 




eighteenth century. It covers every phase of economic en- 
deavor, using its discoveries to create, develop, and improve 
human methodology, mechanisms, and products for the benefit 
of mankind. 

Definition. Research is the systematic examination of and v ' 
experimentation with the known to discover the unknown. 

The Scientific Method. Scientific management research, 
like all other research, is based upon the cardinal principles of 
the scientific method. The late Doctor Thomas Midgley, Jr., 
past president of the American Chemical Society, stated that 
"the reproducible experiment is the accepted scientific 
method." Even today, there are some business leaders who have 
failed to grasp the fact that the scientific method can be of im- 
measurable practical help to them in facing the many and 
varied problems of management. In the midst of the present 
great expansion of industrial research it is surprising, but true, 
that in many instances industry has overlooked the necessity 
for managerial research on its own door step. There are rela- 
tively few concerns which have set up research units devoted 
to the solution of their managerial problems. 

Terms Used in Research. The vocabulary of research con- 
tains certain basic terms with which the student of research 
techniques should be familiar. 

1. A fact is an incontrovertible actuality— a truth. 

2. An hypothesis is a provisional explanation of fact. 

3. Evidence is a fact or knowledge from which other facts 
or proof may properly be inferred. 

4. Inference is a truth or proposition drawn from another 
truth which is admitted. 

5. A theory is a generalization, arrived at as a result of sys- 
tematic scientific consideration of an hypothesis, for the 
purpose of explaining a phenomenon. 

A theory is based on an hypothesis. 

6. A premise is a statement made, whether proved or as- 
sumed, that serves as a basis for a conclusion. 

7. A principle, as applied to management, is a fundamental 
truth which is universally applicable in its field. 



8. A problem is a combination of conflicting factors for 
which a solution is sought. 

9. Analysis is the separation or resolution of a whole into 
its components or elements for the purpose of examina- 
tion and investigation. 

10. Synthesis is the development or construction of a whole 
from components or elements. 

Terms in themselves can be quite meaningless until they 
are translated into action, based on principles. 

The Scientific Method in Research. The cardinal prin- 
ciples of the scientific method are: 

1. The formulation of a clear concept of the problem 

2. The determination, by analysis, of the elements of the 
problems and their environmental aspects 

3. The collection of those facts which are relevant to the 

4. The classification and logical grouping of the data related 
to the problem 

5. The impartial observation and analysis of the collected 

6. The compilation of definite and accurate conclusions 

based on the facts revealed by the research 

These principles of the scientific method are the fundamental 
techniques of research, which are used by the researcher in 
his step by step progress toward his ultimate goal. 


\i. Defining the Problem. The first step in the intelligent 
conduct of any form of research is to define clearly the prob- 
lem, its scope and limits. 

The total problem as the researcher sees it, if translated 
pictorially, could be likened to an orange, bisected horizon- 
tally. The outer surface of the orange represents the whole 
problem. Within are the sections of the whole, and these in 
turn are composed of multiple contributory components. In 
approaching his given problem, the researcher usually finds 



that it resolves itself into many subsidiary problems or seg- 
ments of the whole problem. A concise, definitive written 
statement of the problem provides a permanent source of 
reference for the research assignment. 

Each sub-problem which arises should be handled individu- 
ally as a separate piece of research and ultimately fitted into 
its place in the pattern of the whole. During the process of 
research, facts may be discovered which will change the 
original concept of the assignment. A researcher must be on 
the alert for unexpected findings and be prepared to adapt 
his course accordingly. 

\ 2. Analyzing the Problem. The second step involves an 
analytical study of the problem to determine its elements, or 
constituents, and their environmental aspects. This means 
breaking down the problem into its integral parts to determine 
the relationship of each part to the whole and to each other. 
A thorough analysis will isolate the components of the prob- 
lem. Each component, or element, must be investigated 
thoroughly and examined systematically to reveal the facts 
or conditions which give the researcher the most complete 
knowledge of his undertaking. 

Only when the problem is reduced to its elemental com- 
ponents the researcher can see the type and nature of the 
facts which he must obtain in order to arrive at the correct 
solution of his assigned problem. 

With these elemental components arrayed before him, and 
realizing that the process of analytic exploration often exposes 
unforeseen facts and unpredictable conditions, the capable 
researcher, armed with enthusiasm and knowledge of his sub- 
ject, meets the challenge to his ability and strives to gain 
supremacy over variants discovered in the parts of his research. 
V Results of Segregation. The process of segregation and 
isolation of problem components may reveal that there are 
gaps or discontinuity in the findings. This may indicate that 
the researcher has not gone deeply enough into his assigned 
problem and that further investigation is essential. It may indi- 
cate also that there are insufficient data available to satisfy the 



requirements of a scientific solution, and that the researcher 
must, at this point, search for the missing links before further 
progress can be accomplished. 

The preliminary study of the problem may signify that the 
inquiry must be carried far beyond the intended limits and 
that special aspects of the investigation may require new data 
and a different type of scientific treatment. These early revela- 
tions may make the cost of a research project prohibitive. 

With the preliminary study completed, the researcher 
should prepare a temporary topical outline 1 and bibliography 
of his project, based on the problem elements discovered. He 
will gain further knowledge of each aspect of his problem by 
searching the literature relating to the field of each element so 
far discovered. 

S 3. Collecting the Facts. The third step is the collecting of 
available, relevant data on the problem. The temporary outline 
serves to guide the researcher to the type of knowledge re- 

The researcher must acquaint himself with the sources and 
availability of desired primary and secondary data. He must 
determine the most accurate and economical means of collect- 
ing and recording the necessary facts. 

The research worker is cautioned to determine the validity 
and reliability of the data and sources before using them. At 
times it is difficult to judge the reliability of information, but 
the researcher must make every effort to utilize verified data 
only in order to safeguard the results of his research. 

Original or primary data are usually more reliable than 
secondary source material. During the process of collecting 
the necessary information, many experiments may be con- 
ducted to discover certain facts, or to verify the applicability 
of data pertinent to the research project. If variations from 
accepted standards or norms are discovered in the data, each 
revealed variable must be examined and tested individually to 
disclose the causes for variation and to determine the weight 
to be given it in the research data. 

1 See Appendix, page 217. 



It is well to have in mind that the person assigned to conduct 
the research may not be the same individual who is assembling 
the research information. For this reason it is essential that all 
collected data be clearly recorded so that another may readily 
get the import of the facts. There is nothing so defeating to a 
researcher than the knowledge that important data have been 
uncovered but lost because of careless recording or filing. This 
carelessness may mean many additional hours of hard work. 
\ 4. Classifying the Facts. The fourth step is the classifying 
and grouping of collected data. The classifying and labeling 
of each item of collected information is absolutely essential so 
that each may be categorized in relation to the other elements 
in that specific unit. A preconceived method or plan for classi- 
fying data should be worked out, premised on the nature 
and characteristics of the research and the facts involved. A 
properly constructed and adhered to plan will be of definite 
aid in conducting a logical analysis of the data. 

Each datum being examined and screened before assign- 
ment to its designated group should be carefully judged for 
its anticipated contribution to the research and its relation to 
the other components of the group or unit. 

5. Analysis and Interpretation of Data. The fifth step is 
the analysis of the tentatively organized data. The analytic 
procedure in management research consists in the reduction of 
the complex problem to the simpler elements, or basic factors, 
of which it is composed. Although each preceding step in- 
volves analysis and examination of data, this final stage de- 
mands thorough analysis and correct interpretation of the 
experimentally arranged data. 


The analyst must be guided by the five fundamentals of 
analytic procedure: 

1. Data and evidence must be investigated in an impartial, 
unbiased manner. 



2. The quantity and quality of data and evidence must be 
analyzed critically to satisfy the analyst that sufficient 
facts have been secured. 

3. Skill in interpreting information depends upon the knowl- 
edge, training, experience, ability, and judgment of the 

4. In conducting analyses, the analyst must never lose his 
vision of the problem as a whole or permit one phase, or 
isolated segment, to claim undue attention. 

5. The research findings must be the result of careful judg- 
ment, based upon the revealed facts and evidence. The 
analyst must prove each conclusion before accepting it. 

Each individual datum must be analyzed and interpreted as 
a single item, as well as in relationship to its respective unit. 
The unit must be interpreted in relation to the other units 
of the group. From the examination of each unit, certain 
inferences and evidence are formulated. Inferences are usually 
founded on facts, and facts are derived from three positive 
sources— personal experience, personal observation, and au- 
thorities in a specific field. 

As the analyses progress and screening of data becomes more 
intensified, it may develop that the collected classified data 
must be reorganized. This may change the whole complexion 
of the research and call for new and additional information. 
The researcher should not overlook conditions surrounding 
each datum, since changes in situation may account for varia- 
tions and omissions. 

The whole purpose of this extensive and intensive analysis 
is to extract every possible piece of information from the 
collected data and to find new or relevant evidence which will 
add to the completeness of the research findings. There is no 
more discouraging situation to any analyst than to find that 
the results of his research must be discounted because of an 
inaccurate statement of facts or lack of a thorough examina- 
tion of data. 

6. Compilation of Conclusions. The sixth step of the sci- 
entific method is the compilation of definite and accurate 



conclusions, based on facts revealed by the research. Develop- 
ing conclusions is synthesizing determined evidence into co- 
ordinated groups of data, based on its particular nature and 
specific relationship to other factors. By combining the groups 
into a whole, based on sequence or relationship of evidence, 
a logical synthesis of the solution of the problem is ascer- 
tained. Conclusions must be verified. Success in research is 
directly proportional to the intensity of the efforts of research 

The conclusions and recommendations of the research find- 
ings are usually recorded in the form of a report and submitted 
to the head of the research unit for approval before being 
forwarded to the interested executive. 


Research is not a commodity that can be bought and sold 
like scrap iron; it is the combined endeavor of trained persons 
working in a research group searching for facts. The success- 
ful conduct of business research depends upon having and 
properly utilizing the necessary mental and physical compo- 
nents. The mental component refers to the qualifications of 
the research workers; the physical, to the materials, equip- 
ment, buildings, and surroundings which are available to the 
investigators. The quality of research depends upon the spe- 
cial characteristics of the researcher, such as intelligence, dex- 
terity, perseverance, thoroughness, and accuracy. Research 
may be either mental or manual, or a combination of both, 
depending on the nature of the problem. 

The Research Unit. Relatively few business concerns can 
afford to include a research unit in their respective organiza- 
tions, although many conduct research through the medium 
of one qualified person, who perhaps devotes most of his time 
to execution of other duties. It is the practice of some small 
business enterprises to use the services of research labora- 
tories to solve their research problems as they arise. 

There are endless variations in the size and qualifications 



of research staffs, depending upon the specific interests of 
the concern. One example of a well-balanced nucleus for a 
management research organization would be a well-qualified 
graduate engineer, an economist, and a scientist, with a busi- 
ness administrator as chairman of the group. 


Qualifications. The usual accepted policy for the employ- 
ment of research personnel is based upon qualifications and 
experience, rather than on personality and other character- 
istics. Many business concerns have established research job 
specifications, with emphasis placed upon knowledge, judg- 
ment, ability, training, and accuracy. It would be well when 
hiring a research worker if the interviewer were qualified to 
recognize personal fundamentals, such as integrity and will- 
ingness to accept responsibility for an intricate, time-consum- 
ing type of employment. These fundamentals are basic 
requirements for the proper conduct of business research. The 
ultimate goal of all research is the establishment of facts 
through the "reproducible experiment." The ideal research 
worker should possess a high degree of intellectual honesty, 
intellectual curiosity, and constructive imagination. 

Many of the present great inventions are the results of 
fertile imagination applied to the research activity of yester- 
day. For example, the incandescent electric lamp was born of 
the research efforts of De la Rue in the year 1820, but did not 
become commercially useful until 1879, when "Thomas A. 
Edison combined the four-known requirements and received 
patent rights in 1880." 1 

Personnel Traits of the Research Analyst. Perseverance, 
tenacity, and ingenuity are among other distinguishing traits 
of the true research analyst. The intellectual stamina to con- 
centrate attention on obstacles which tend to retard research 

1 Authority: John W. Howell and Henry Schroeder, History of the 
Incomdescent Lamp, The Maqua Company, New York, 1927, p. 61. 



investigation must be a part of every research worker, and he 
should possess the faculty of retaining ideas and information 
which he has discovered in the progress of his research en- 
deavor. Many research projects extend from generation to 
generation without solution, such as the search for the cause 
and cure of cancer. Atomic energy would not have reached its 
present stage had it not been for the intensive concentration 
of outstanding scientific minds of the world and a seemingly 
inexhaustible supply of capital. 

Ingenuity a Requisite. The researcher is often called upon 
to use ingenuity. When his experimental work seems doomed 
to failure, he must devise ways and means of attacking the 
problem from a different angle or another point of view. To 
improvise at apparent failure points may take the research 
worker "over the hump" to a successful landing. 

Research Teamwork. Because the industrial research lab- 
oratory of today is a large unit, composed of many different 
and varied activities conducted by specialists in each field of 
work, co-operation among these specialists is one of the es- 
sentials of organized research. Each researcher must aid and 
contribute what he can to his fellow workers as well as master 
the problems assigned to him. Teamwork and morale are the 
two factors which tend to build a cohesive, well-balanced 
research group, with clear relationships among its members. 
This form of relationship will develop the required type of 
morale which, if maintained, will make the group respond 
effectively to emergencies and to the unusual problems pre- 
sented in industrial research. 

A research man is asked to give to his job an intensity, dedi- 
cation, and selflessness that few positions demand. In view of 
this, an employer must give whole-hearted consideration to 
the well-being of his researchers. 

Research Personnel Morale. Among the requisites for 
maintaining effective research morale are the following: 

1 . An intelligent leader as chief of the research organization 

2. Prospects for economic security for the worker 



3. Adequate compensation for researchers, based on their 
knowledge, training, and experience and the nature of 
their work 

4. Liberal hours of work 

(Some researchers should not be tied down to definite hours 
because there may be prolonged periods of experimentation 
or study in which the researcher does not want to leave his 
work, as this may interrupt progress and break up the con- 
tinuity of thought. Irregular hours are often the accepted 
practice of the research organization. Occasional vacations 
after extended periods of intensive concentration will relieve 
the mental pressure on the researcher and help to prepare him 
for the next project.) 

5. Recognition for research discoveries 

6. Adequate physical equipment for research procedure 

Physical Components of Research. The very nature of 
industrial research requires concentration, intensive applica- 
tion, and physical conditions appropriate to this type of 
undertaking. Many large concerns realize that special space 
or areas must be provided for those persons assigned to re- 
search. Well-lighted rooms, free from noise or other distract- 
ing influences, with easy access to laboratories and libraries, 
should be set aside for research activities. Adequate research 
equipment and services, based on the nature and type of work, 
should be readily available to all engaged in research. 


Cost of Research. As a general rule, research costs include 
the costs of materials, labor, and expenses involved in experi- 
mental activity, design, development, supervision, and other 
factors applied to a research project from its inception to 
completion. Because of the uncertainty of research results 
some executives assume the so-called conservative attitude by 
writing off research costs to general administrative expense. 
It is true that research often ends in costly failure, but risk is 
one of the dominant elements of business enterprise. Lack of 



research is industry's greatest current hazard. Research sup- 
plies benefits that may be enjoyed through future years, and 
the task of putting a dollar value on these unrealized profits is 
extremely difficult. 

Industrial research for some of the leading industrial cor- 
porations has been estimated to consume annually between 
2 and 10 per cent of the net profit, before taxes have been 
deducted. The use of larger amounts of money for practical 
research activities usually can be justified, but the use of 
smaller portions of the net may be extremely detrimental to 
the future position of the company. One of the more practical 
"rule of thumb" methods for determining the expenditure re- 
quired for research is that the amount should be sufficient to 
promote future leadership over competitor companies. During 
the major depression of the 1930's one chemical company 
placed additional emphasis on its research programs, with the 
result that the end of the depression found the company one 
of the leaders in its field. Money spent on research may some 
day prove to be the insurance needed to maintain the strength 
of the corporation. 

Financing Research Projects. If the percentage of profit 
allocated to research is not sufficient to justify the establish- 
ment of an independent research unit, other methods should 
be utilized to supply the need. Possibly a company may find 
it beneficial to join an association which sponsors research for 
its members. Sometimes it is desirable to retain a consultant to 
handle individual research projects. Often specific problems 
can be given out under contract to commercial research lab- 
oratories. Another popular method is to support a fellowship 
at some university or research institute. Regardless of the size 
of the company, some form of research can be adopted which 
will be in harmony with its financial position. 

Accounting Procedure for Research. There are several 
methods in practice for handling the expense of maintaining 
industrial research. The principal ones are (1) capitalizing 
research expense, with proportionate reduction of this capitali- 
zation over the following years as the results of such research 



mature; (2) charging off all research expenditures to the cur- 
rent year's operating expense; and (3) deducting the cost of 
research from the net profit, or earned surplus, at the end of 
each year. Practically speaking, very few companies employ 
just one of the above policies. Usually a combination of the 
three methods is used to take care of research expenses. 

Research Development Costs. The cost of research in- 
curred in the development of processes already in use or 
products already in production frequently is charged to cur- 
rent operating expense. Research work resulting in new prod- 
ucts or processes, as well as development of such new products 
or processes, may be capitalized and written off over a short 
period of years or charged to the cost of producing a specified 
number of these new products. As a result, the sales price of 
the product will be high when they first appear on the market. 
For example, spherical-pointed fountain pens sold as high as 
fifteen dollars when they were first put on the market; today, 
one can be purchased for 5 per cent of that price. 

Accounting Procedure for Pure Research. Fundamental, 
or pure research, is generally capitalized for a longer period of 
years than applied research, or it may be charged off each 
year as an administrative expense. Often in planning the in- 
dustrial research program, it is necessary to include several 
short-term projects of a direct nature to help offset the ex- 
pense of some of the pure-research projects which come to 
fruition slowly. 

Budgetary Control Applied to Research. The financial 
administration of research can be achieved through budgetary 
control, although this type of control frequently meets oppo- 
sition from the research worker. The major objection to the 
operation of a research budget is that the cost of the work 
being budgeted cannot be determined accurately in advance, 
' since the magnitude and scope of the project is unpredictable. 
Coupled with this objection is the sentiment that research 
should not be subjected to financial limitations. The objections 
have been overcome in most industries, and budgetary control 
is generally practiced. 



The major requirement of a budget for research is flexibility. 
Consequently, the budgetary period should not be too long, 
six months or a . year being a commonly accepted period. To 
facilitate the recording of research expense and to provide for 
future cost estimates of similar research projects, a system of 
research project orders should be established. Each research 
project order should be assigned a number, based on the classi- 
fication of the project, and all material, labor, and expense 
costs of the project should be recorded on the order. 

Research Department Expense. The expenses involved in 
operating the research department may be accumulated on a 
departmental expense order and the monthly total then pro- 
rated to the various research project orders on a definite, 
equitable basis. 

The research project order usually provides for a classifica- 
tion of costs of component activities, such as (i) designing 
the proposed product, which includes research investigation, 
the work of designing and revising the design, and making and 
testing models, or mock-ups; (2) preparing the specifications 
for the raw materials, parts, operations, and product, and de- 
termining specifications for inspection procedure; (3) design- 
ing and trying-out tooling; (4) conducting trial runs or 
operating a pilot plant; (5) maintaining laboratory equip- 
ment; and (6) research administrative expenses. 

Cost Control System. A research cost control system must 
provide for measuring project costs against the project budget, 
fixing responsibility for control of the project, and showing 
the items of cost by classification, so that each may be checked 
with estimates of material, labor, and expense. 

Research results are always profitable from the standpoint 
of experience, although some may be invisible, others difficult 
to measure, and still others financial failures. 

Management research should concentrate some of its en- 
ergies on developing a formula for allotting funds for research 
purposes. Such a formula should provide a basis for planning 
research projects and preparing future programs of the con- 
cern. Planning and control of research, supplemented by 



proper accounting procedures and a flexible budget, are in- 
valuable to those responsible for guiding research activities. 

Analysis of Research Costs. Research project orders 
should be constantly analyzed to prevent excessive costs of 
research and development work. The purpose of analysis is 
control, not the retarding of progress. 

A research budget is based upon previous costs and antici- 
pated emphasis upon future projects. A system of research 
project orders enables the budget officer to prepare a research 
budget and expense report showing the costs of the various 
projects as well as the cost of operating a research unit or 

Compilation of such expenses permits the issuing of periodic 
statements comparing actual expense to budgeted expense for 
the same period. Large deviations from standards can be im- 
mediately investigated and the budget adjusted for future 
operations, or the emphasis upon research work corrected to 
the original schedule. 

All research expenditures should be subject to some definite 
form of control. Efficient administration of research expenses 
has been one of the aids indirectly facilitating the growth of 
industrial research. 

Research, beacon of man's future progress, should not be 
dimmed because of unwise economic retrenchment. The cur- 
rent and future values of a research project should be assayed 
most carefully before reducing expenditures. 

The prevailing pattern of our present economy is one of 
change, based on intensive research, a change difficult to fore- 
cast and to measure. It would be a fallacy for one to prophesy 
what research may accomplish in the future. The acorns of 
research planted today will be the mighty oaks of tomorrow's 


Organization Research 

The Business Administrator. The phenomenal growth of 
industry has placed new demands upon business administrators 
and executives for decisions. These persons depend upon a 
vast amount of correct information on such factors as eco- 
nomic conditions, finance, plant production, and marketing 
possibilities. In the corporate form of enterprise, administrators 
are not expected to be experts in every phase of business en- 
deavor, but they must have the ability to utilize the knowledge 
supplied by executives and staff members. 

Causes of Price Decline. In periods of high price levels, in- 
dustrial leaders are usually under fire as being responsible for 
the situation. It is claimed that by increasing production and 
using economical manufacturing procedure, prices will de- 
cline and wages will remain constant. This is true, with the 
following provisions: that the cost of labor is in proportion to 
other costs of production; that industry is permitted by labor, 
legislation, or availability, to install the necessary mechanisms, 
procedures, and methods; and that industry has sufficient re- 
serve capital to finance the innovations in operations. These 
are matters that a research staff can determine. 

Eliminating the Element of Surprise. The tempo of busi- 
ness today precludes leisurely decisions. With a relatively small 
but well-qualified group of management researchers, an ad- 
ministrator can do much to eliminate the element of surprise, 
always a hazard in industry. Scientific foresight is industry 




The Executive Needs Factual Information. The modern 
business executive is often untrained in applying the technique 
of research, and he has insufficient time to conduct extensive 
research on vitally important problems. This makes it impera- 
tive that he be supplied with the required information by a 
management research unit. Where management research is a 
part of the internal organization, executives do well to take 
full advantage of the findings of this service. The utilization of 
this service can replace much of the wishful thinking and 
"luck" on which some business leaders depend. Businessmen, 
today, are only as good as their sources of information. Hence 
it behooves business leaders to establish well-organized man- 
agement research units in their enterprises for the purpose of 
gathering and compiling necessary facts vital to the critical 
decisions necessary for the solution of modern economic 

Management research explores each and every phase of 
business activity which originates in the execution of manage- 
ment responsibilities. 1 The X-ray of management research 
should be concentrated first on those fundamentals which 
constitute the foundation of business enterprise. 


Sound Business Policies. The first responsibility of man- 
agement is the formulation of sound business policies. This 
can be accomplished only after the necessary research has 
been conducted to establish a basis for preparing the essential 
long-term plans for the enterprise. Many of the large in- 
dustries prepare plans covering proposed activity for as many 
as five or more years. Successful long-term planning— the 
duty of the administrative level of management— is a preview 
of the proposed course, which the business should follow and 
is the primary basis for subsidiary planning. 

Long-term planning includes measuring current economic 
forces and forecasting future economic trends; foreseeing 

1 Cf. ante, page 6. 



probable technological advances in products, machines, and 
methodology of manufacture; anticipating new modes and 
faster means of transportation; and estimating the extent of 
changes in consumer demand. 

The original plan on which a business is formed is the 
foundation for research in policy formulation. 1 

A management policy is an instrument of co-ordination and 
control which provides unity of action and consistency of 
procedure. Policies can be interpreted as the company's laws, 
which govern the present and future activities of the enter- 
prise. No policy should be put into operation until manage- 
ment research tests and measures its probable effects and 

Examples of Business Policies. The most recurrent pol- 
icies of business are those dealing with finance, purchasing, 
production, labor, and sales. An example of each type of policy 

r. All funds of the company shall be deposited in deposi- 
tories designated by the board of directors. 

2. All purchasing shall be conducted on a competitive basis. 

3. All production of parts or products shall be carried on 
within the plant; no parts shall be purchased from outside 

4. All employees shall be paid the prevailing wage rates, 
consistent with the type of work performed. 

5. All manufactured products shall be sold to and distributed 
by retailers. 

Even after an established policy has long been in operation, 
the stethoscope of management research must constantly check 
its soundness. 

Financing the Enterprise. The second responsibility of 
management is to finance the enterprise. Financing an enter- 
prise requires not only research to forecast future economic 
activity but research to determine the amount of funds re- 
quired and the most economical methods of adequately fi- 
nancing the undertaking. The cyclical movements of business 

1 Cf . ante, page 8. 



activity from period to period have a decided influence on 
formulating financial policies. 

Long-term financial planning demands exacting research in 
order to set the pace for carrying out the proposed program. 
The company's management research unit must forecast the 
financial requirements several years in advance, particularly 
during a period of company expansion when new capital may 
be required. Financial research is a sound safeguard against 

Through research administrative management determines 
financial requirements in terms of fixed capital, working capi- 
tal, and the ratio which should exist between the fixed capital 
investment and expected annual sales. This class of research 
also reveals the estimated cost of conducting operations and 
the estimated profit from anticipated sales. 

With this financial information exposed through the eyes 
of research, administrative management compares the amount 
of capital available with required funds. If there is insufficient 
capital, it is the function of research to find the most economi- 
cal and practical method upon which to base a plan for sound 

Kinds of Enterprise. It is within the province of manage- 
ment research to examine, select, and propose suitable financial 
instruments for raising the required capital to initiate an 
enterprise and start it on a sound financial plan. Individual 
proprietorships and partnerships do not face the same problems 
in securing capital as do the corporation and other similar 
forms of business organization. As a general rule, the first two 
kinds of enterprise are financed by the owners or the partners 
through personal capital or borrowed funds, while the latter 
use corporate securities. 

The capitalistic system, with its multiple legal forms of 
monetary instruments for procuring capital, is partly respon- 
sible for today's huge corporate enterprises. 

Financial instruments. Large industrial organizations usually 
depend upon their own management research units to study 
the wide variety of financial instruments available and make 



recommendations to the finance committee of the board of 

Stocks and bonds are the characteristic money-raising finan- 
cial instruments of the corporation. Corporate stock represents 
ownership, while corporate bonds represent a loan to a corpo- 
ration at a set rate of interest. There are many means for 
raising funds, such as mortgages, notes, and debentures. The 
owners of a business may retain the services of a financial 
promoter who, after the required study, recommends the type 
of securities most desirable for a particular kind of business. 
The technique of financial promotion is highly developed and 
many financial houses specialize in the procedures necessary 
to start a business venture by securing the corporate charter 
and having the financial instruments issued in the name of 
the corporation. 

Common Stock and Preferred Stock. Shrewd corpora- 
tion researchers will not take long to sense the advantages 
and disadvantages of issuing one or more of the several types 
of securities. Common stock, with or without par value, may 
offer greater opportunities than a preferred stock with a stated 
rate of dividend; bonds at a low rate of interest may be the 
correct class of security for this or that class of business; or 
preferred stock with conversion features, may give the cor- 
poration a golden opportunity to place its stock in the hands 
of the public. 

Financing a Going Concern. An investigation of the vari- 
eties of financial instruments and the numerous methods of 
obtaining capital is part of the duties of a managerial research 
unit. Research investigation for financing a corporate enter- 
prise must cover types of stock— common and preferred— with 
or without voting privileges and par value, the maturity dates 
of corporate bonds, interest rates, and changing money 

Management's financial responsibility does not, of course, 
cease after the procedure of financing the new enterprise has 
been accomplished; rather it turns its attention to the financial 
operations of a going concern. 



Financing Questions to Be Answered. Managerial re- 
search is, here, used to answer such questions as the following: 

1. Is the company's capital structure adequate for present 
requirements and the most advantageous to be had 
under present monetary conditions? 

2. Is it desirable to take advantage of the money market 
and borrow capital at low interest rates for future ex- 
pansion of facilities? 

3. Has due consideration been given to the relative advan- 
tages and disadvantages of high price and low cost of 
money from the standpoint of buying and selling? 

4. What is the proper ratio of borrowed capital to owned 
capital for this particular type of enterprise? 

5. Can capital turnover be increased? 

6. Is the capital invested confined to profitable lines of 

7. Is the company preserving a well-balanced capital 

a. Are proper ratios of current assets to capital assets 
being maintained? 

b. Are proper ratios of assets to income from sales being 

8. Is the company keeping an equitable share of its assets 
liquid to take care of current liabilities, cash discounts, 
and opportunities for acquiring commodities at advan- 
tageous prices? 

9. What percentage of earnings is being applied to div- 
idends, and what percentage is being set aside in surplus 
for future use? 

10. Are sufficient and adequate reserves provided to cover 
depreciating assets and business contingencies? 

11. Is foresight being used in planning financial operations? 

a. From what sources can capital be procured? 

b. Can capital be obtained when needed? 

12. Has the company adopted a systematic plan for financ- 
ing its activities? 

13. Are cash resources and requirements planned and cor- 
related for a reasonable period in advance through some 
form of cash budget? 



14. Does the company control the size and activity of bank 
accounts in individual depositories so as to minimize 
bank service charges? 

15. Are all executive actions and decisions weighed from the 
standpoint of their effect on the company's tax liability? 

16. Does the company have inactive or obsolete assets that 
might profitably be converted into cash? 

17. Is there an adequate plan of audit that safeguards against 
unauthorized or excess payments, and does it serve to 
detect inaccuracy or dishonesty in the company's 

a. Does this apply also to branch locations? 

18. Is it a policy to take advantage of all cash discounts on 
purchases, and is there some means of insuring that this 
policy is consistently followed? 

19. Is credit granted on decisions based on an objective 
appraisal of the risk involved, but with a practical con- 
sideration of the sales angle? 

20. Is the credit status of old customers appraised in terms 
of current conditions? 

a. Are accounts receivable "aged" at frequent intervals, 
and is close check kept on their liquidity? 

b. Has consideration been given to the possibility of 
eliminating the mailing of monthly statements to 

c. Are notes receivable examined periodically? 

21. Have proper accounting procedures and standards been 

22. Has an adequate system of budgetary control been 
established and maintained? 

23. Are the books of the company audited by certified 
public accountants? 

Controling the Expenditure of Funds. The third mana- 
gerial responsibility is to control the expenditure of funds. To 
do this, management applies the "principle of control" 1 to 
expenditures of funds. Administrative planning, based on 
managerial research, is the motivating nucleus for positive 

1 Cf. ante, page 10 et seq. i 



Budgetary Control. The budget, 1 one of management's 
dominant instruments of operating control, with its tentacles 
stretching out to each function of a business, is conceived and 
constructed by management research and executed by those 
responsible for the control of funds. Continuous investigation 
of variations between the budgeted figures and actual operating 
results discloses profit-producing expenditures as well as 
profit-absorbing expenditures, which increase the cost of the 
product or service without adding value to it. 

Research Projects in Accounting Control. Yet, the opera- 
tion of a system of budgetary control will not be sufficient to 
give management positive control over expenditures. It must 
be complemented by other control factors which managerial 
research can find by obtaining the correct answers to such 
questions as: 

1. Is there an adequate system of financial planning? 

2. Is there a classified monthly cash budget or forecast of 
receipts, disbursements, and bank balances? 

3. Are there daily cash receipt controls? 

a. Does the cash receipt form show items, cumulative 
and comparative? 

4. Are there daily cash disbursement controls? 

a. Does the cash disbursement form reveal items, cumu- 
lative and comparative? 

5. Is there a daily bank balance control? 

6. Is there a daily control of accounts and notes receivable? 

7. Is there a daily control of shipments and customer 

8. Is there a daily control of vendor invoices? 

9. Are there adequate controls over payroll procedures? 

10. Is there an adequate control of incoming materials and 

a. Are receiving reports and inspection reports issued? 

11. Is there a proper material control system? 

12. Are accurate records kept of all equipment? 

13. Is there an adequate system of cost accounting? 

14. Is the general accounting system adequate? 

1 Cf. ante, page 17. 



The budget, when supplemented by other control instru- 
ments and properly used by experienced executives, will re- 
veal efficiencies in plant operations and hidden inefficiencies 
in plant utility. 

Developing a Controlled Organization. The fourth re- 
sponsibility of management is to develop an organization whose 
functions are logically assigned to competent individuals. To 
do this management applies the principle of planning, 1 which 
in part calls for the development of a properly balanced, co- 
ordinated, and controlled organization. Organization is an 
instrument of management through which authority and re- 
sponsibility are delegated to others for the purpose of exer- 
cising control and creating unity of action. An organization 
is a unit composed of interdependent parts. 

In business, to organize means to group activities according 
to functional relationships and similarities for the purpose of 
creating a unit. 

Composition of a Business Organization. A business or- 
ganization is composed of human and physical resources. The 
human resources consist of the various types of personnel 
required for a specific class of business. The physical resources 
include land, buildings, machinery, equipment, and materials. 
Combining these resources into logical, functional units for 
operation is the process of organizing a business. Management 
research is called upon to determine the correct proportions 
of each resource required to create a balanced, flexible, and 
progressive organization. 


Management research has shown from its investigation of 
business activity that there are six fundamental functions 
common to all forms of business, although these activities may 
be vested in a single entrepreneur. 

Modern business activity is an administered combination of 

1 Cf. ante, page 9. 



these fundamental factors: i, creation, the idea or design 
component; 2, finance, the capital or monies required to initi- 
ate and operate a business; 3, procurement, acquiring the es- 
sential materials and services; 4, personnel, the necessary 
human resources and labor relations; 5, conversion, the chang- 
ing of procured materials by labor to economic goods or 
service; and 6, distribution, the marketing or sale of produced 
goods or services. 

Parts of Organization. There are two distinct parts to 
organization, the concept and the process. The concept is an 
invisible structure of functions collocated on levels of author- 
ity, defining limits of responsibility, showing scope of execu- 
tive control, and exemplified by the organization chart. The 
process is dynamic, combining available resources to secure 
unity of purpose and action. 

Principles of Organization. The process of organizing is 
based upon the application of three fundamental principles: 

1 . The principle of centralization of authority 

2. The principle of integration 

3. The principle of human requirements 

(1) The Principle of Centralization of Authority. Au- 
thority first must be centralized in one group or one person, 
then delegated by it or him to administrators and executives 
who will be responsible for direction and control of the 

Authority is the vested right to decide, command, and act. 
It is definite, determinative, and absolute. Authority is the 
intangible force which creates organization. The ultimate pur- 
pose of all organization is unification; hence, a supreme author- 
ity is indispensable. 

The responsibility for executing an order must be 
accompanied by the delegated authority to take that action. 
Accountability and control are intrinsic in authority. Man- 
agement accountability, or responsibility, implies a moral and 
physical obligation to execute a duty or assignment. 

(2) The Principle of Integration. The consolidation of 
component activities of a function must be based on similar 



and complementary relationships of those activities to that 
function. Functions must be established as physical entities 
and colligated by management as an organization! The execu- 
tion of this principle creates a unit composed of management 
functions and organizational departments, each consisting of 
integrant divisions and sections; for example, a sales depart- 
ment that is composed of a selling division, an advertising 
division, and a shipping division. The principle of integration 
is predicated upon the management principle of preparation, 1 
which includes determining the nature of the business and 
revealing the type of its functions. 

Out of the principle of integration have grown the economic 
principles of division of labor and specialization of effort. 2 
Sound organization results from integration, based on defini- 
tion of functions, types and characteristics of work, and the 
human elements required. 

Organization Structure. A business organization structure 
can be pictured by vertical and horizontal lines or co-ordinates. 
Vertical ordinates are used to represent channels of authority, 
from administration to labor. Horizontal lines or abscissas de- 
lineate levels of authority based on specialization of activity. 

In corporate-organization structure (see chart on pages 
66-67) tne vertical lines or ordinates show channels of author- 
ity from the board of directors to the president and from him 
through the executives and supervisory staff to the workers. 
The main horizontal line or abscissa depicts the six funda- 
mental functions of business as departments. In instances 
where a department is composed of auxiliary units or divisions 
of specialization, they are arranged pictorially as a lower hori- 
zontal line of the structural chart. 

(3) The Principle of Human Requirements. The selec- 
tion of human resources is predicated upon the nature and 
characteristics of the work to be accomplished. The moti- 
vating force of an organization is its human resources; the 
more accurate the selection of its personnel, the greater will 

1 Cf. ante, page 8. 

2 Cf. ante, pages 6-7 et seq. 





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be the efficiency of its operations. It is the responsibility of 
management to man the organization with individuals compe- 
tent to fulfill the requirements of each functional unit. 

The selection of manpower for an organization should be 
founded on personnel research. 


The nature of the business predetermines the functions of 
the organization. The application of the principle of integra- 
tion reveals the nature of each of the component activities. 
Personnel research is an aid in discovering the qualifications 
sought in the human element. When possible, as in great 
industries, the ideal method of obtaining executives would be 
to base each selection upon a careful analysis by a qualified 
personnel analyst to find the right person to head up each 
administrative and executive function. Research in this field 
has produced an accepted list of major qualifications, namely: 

1. Intellectual ability 7. Training 

2. Creative thinking 8. Experience 

3. Distinctive leadership 9. Honesty 

4. Power of decision 10. Integrity 

5. Ability to assume responsibility n. Courage 

6. Personal initiative 12. Personality 

All personnel policies should be established upon adequate 
research into the specific needs of a business enterprise. 

The efficiency of an organization depends upon personnel 
vested with authority to carry out their various responsibilities 
in the conduct of its functions. 

Key Executives Required. The proper staffing of an enter- 
prise includes a program of continual development and train- 
ing of selected individuals to occupy key positions. The choice 
of persons for prospective key executives, based primarily on 
accepted qualifications, is fundamental to the future efficiency 
and progress of an enterprise. Many of the large corporations 



realize the importance of having available a group of well- 
qualified persons ready to fill key positions when change or 
retirement of supervisors and executives occurs. 

Selecting Prospective Executives. In selecting new re- 
cruits, a number of companies are using the placement facilities 
of universities throughout the country to supply them with 
graduate students, trained in various fields of business or 
science. 4 

A selected candidate should be personally interviewed by 
the executive for whom he expects to work so that the execu- 
tive may judge the applicant in the light of the requirements 
of the position. 

From the standpoint of company morale, executives must 
avoid filling too many key positions with outside persons in- 
stead of training present employees and progressively ad- 
vancing them through the various steps toward ultimate key 

Training Prospective Executives. The development of a 
training program for these new prospective executives must 
be predicated upon intensive research to determine the most 
efficient, effective, and economical procedures for carrying 
out such a plan.' 

Research in the field of executive training should be con- 
centrated first on discovering the requirements of a position 
and then developing the best methods for training a person to 
acquire the knowledge which will fit him for the key position. 
A great deal of the training should be done on the job, or the 
candidate may act as an assistant to the executive in charge of 
the particular function. "Training by doing is considered good 
pedagogical methodology 

A Training Manual. The results of research in developing 
training programs for all key positions should be compiled in 
the form of a training manual and used to give trainees a clear 
concept of efficient performance of each key position. A 
manual of this nature, used in conjunction with a functional 
organization chart, is valuable for an understanding of the 
relationship which one function bears to another. 



Training for management includes the training of candi- 
dates, foremen, supervisors, and executives. 

The effective application of the three foregoing principles 
of organization and proper management research partially ful- 
fill management's fourth responsibility to develop an organi- 
zation whose functions are logically assigned to competent 

Here again, management research is a powerful factor in 
organizing an enterprise. It may prove to be the difference 
between success and failure. 

Legal Forms of Business Organization. Management is 
obligated to decide upon the legal form of organization which 
it desires to adopt in carrying out the proposed venture. One 
type may offer greater advantages than another, depending 
upon the nature of the business. The usual types of legal 
organization are (i) sole proprietorship; (2) partnership; 
(3) corporation; (4) joint venture; (5) joint stock company; 
(6) Massachusetts trust. The first three are the most common 
forms of legal organization. 

1. Sole Proprietorship. The simplest legal form of business 
organization is sole proprietorship in which the owner and 
manager are the same individual, who operates his own busi- 
ness with the assistance of one or more employees. The owner 
is responsible and liable for all business activities. 

The advantages and disadvantages of sole proprietorship are: 

Ease in forming the company 
Flexibility of management 
Centralized authority 
Privacy of activity 
Freedom from organization 
and franchise tax 

Financial limitations 
Difficulty of raising capital 
Owner has full financial risk ' 
Lack of continuity by reason 
of illness or death of owner 
Limitations on expansion 

Sole proprietorship is the most common legal form of busi- 
ness organization in the United States, although it is decreasing 
in relative importance to other forms of organization. 



2. Partnership. A partnership has been defined as an asso- 
ciation of two or more persons to conduct a business as co- 
owners for profit. Each partner contributes property or 
services as mutually agreed upon, and each has a predetermined 
percentage in the profit. The advantages and disadvantages, 
somewhat similar to those of the sole proprietorship, are: 

Advantages Disadvantages 
Ease of organizing Unlimited liability 

Usually adequate finances to Divided authority 

start business Possibility of friction 

Income from business divided Difficulty of obtaining addi- 

only among partners tional capital if required 

Flexibility of management, Uncertainty of life of business 

provided partners agree as defined in the partnership 

Free from organization and agreement 

franchise tax 

If the owners decide upon a partnership form of organiza- 
tion, it is important that they execute a co-partnership agree- 
ment in writing before the proper legal authority. 

3. Corporation. A corporation is an artificial legal entity, 
voluntarily organized for specific purposes by one or more 
persons, under the provisions of the corporation statutes of a 
state, the limit of whose existence, powers, and liberties is 
prescribed in its charter. Under its given corporate name, a 
corporation can enter into contracts and it can sue and be 
sued. The advantages and disadvantages are: 

Definite limitation of owner 

Management concentrated in a 

small, selected group 
Perpetual existence 
Owner interests are transferable 
Relative ease of obtaining 


The corporation bears the bur- 
den of heavy government 
Types of control by govern- 

Formation is complex 
Considerable variance in state 
corporation laws 



It is good managerial practice to study the various legal 
forms suitable to a given type of business in order to find the 
one most applicable. 

The Organization Pattern. In further fulfilling the re- 
quirements of this fourth responsibility, management must 
determine, through adequate research, the desirability for cen- 
tralizing or decentralizing business operations. The present 
trend seems to point toward decentralization of activity, with 
smaller, self-contained operating units. These units are widely 
distributed, functioning as organizations, and have the ad- 
ministrative management centralized at a so-called home office, 
centrally located. 

The Board of Directors. A typical pattern of a medium- 
sized centralized manufacturing corporation may be visualized 
in the organization chart on page 66. In this case, the or- 
ganization structure is developed along the traditional plan of 
functionalized activities. Administrative management is vested 
in the board of directors by the owners or stockholders. Its 
operations are co-ordinated and controlled by a chairman, duly 
appointed by the members of the board. A corporation board 
normally consists of a group of experienced business men, 
numbering from about eleven to fifteen persons. The group 
is usually composed of representatives of management, owners, 
and capable outside business administrators. However, the 
number of persons and composition varies according to the 
size and nature of the enterprise. There is no standard. 

Where a board of directors is predominantly composed of 
large stockholders, it is likely to be interested in the future 
welfare of the company as a whole and to prescribe long-range 
policies. If the board is, however, dominated by full-time 
executives of the concern, there is a possibility that current 
dividends may be the essential factor. 

A directorate of experienced business men of proven ability, 
with a majority selected from the outside and interested in 
the enterprise, has many favorable features. Each of these 
persons is selected because of his specialized knowledge in 



a certain field; because of his contacts with other business con- 
cerns, his opinions and decisions are invaluable. 

A company major executive as a board member has much 
to offer because of his familiarity with internal operations. 
However, it is a good policy to keep board members out of 

Many business executives are advocating boards composed 
of professional directors who represent the owners and are 
on the concern's executive payroll. Such directors may serve 
on the boards of other noncompeting enterprises. 

Usually the chairman presides at all meetings of the board 
of directors and at the annual meeting of stockholders. In his 
absence, the president occupies the chair. 

The Executive and the Finance Committee. Certain 
board members are appointed to various committees, such as 
the executive committee and the finance committee. Members 
of the executive committee are on call and are authorized to 
act on urgent matters in the absence of the board. The finance 
committee is constituted as the financial eye of the board. The 
finance committee presents the budget to the board; acts as 
the "master mind" guiding the financial plan; employs the 
outside certified public accountants; presents the financial 
statement to the board at stated periods; recommends remuner- 
ation for executives; and acts on other requests of the board. 

Powers and Duties of a Directorate. Usually the bylaws 
of a corporation prescribe the powers and duties of the board 
of directors. Included in those duties are: establishing the 
major objectives of the corporation; approving or formulat- 
ing its basic policies; defining the organization structure and 
approving subsequent changes therein; selecting and removing 
corporate officers; approving all salaries over a stipulated 
amount; engaging the certified public accountants and other 
professional persons; authorizing all proposed changes in the 
financial structure; defining the requirements of working capi- 
tal; determining the proper disposition of corporate income; 
authorizing expansion or replacement of plant and facilities; 



specifying the depositories to be used for the monies of the 
corporation; authorizing employee benefit plans, such as pen- 
sions, thrift savings, etc.; designating stock transfer agents; 
approving reports for the stockholders; approving research 
projects; approving all contracts over a specified amount; and 
attending to all other matters which require decision or ap- 
proval of the board of directors. 

The Junior Board. The organization chart shows a junior 
board of directors reporting to the executive committee. This 
board is a relatively new development in company manage- 
ment. It is composed of approximately thirteen selected young 
executives, who, as part of their executive training program, 
discuss some of the problems of the regular board of directors 
and submit their solutions and decisions to the executive com- 
mittee for presentation to the senior board. Since the advent 
of this form of multiple management, concerns using it have 
reported considerable development of their younger executive 
group. These young potentials make fine material for the 
senior board. 

The Corporation Officers. The president, appointed by the 
senior board of directors, is the chief administrative officer of 
the corporation. He is responsible for interpreting the policies 
and seeing that they are carried out. The secretary, treasurer, 
attorney, internal auditor, and director of research report to 

The general manager, usually selected by the president and 
approved by the board of directors, is the chief executive 
officer of the company and is responsible for conducting all 
operations, with the aid of the various departmental executives. 

Organization for Research. The research department, 
under the direction and supervision of a director of research, 
is responsible for management and technical research. While 
this form of research organization is somewhat unusual, it is, 
nevertheless, in the experimental stage. 

The director of research, a well-trained and experienced 
business administrator, is responsible for co-ordinating all com- 
pany research, A business executive in charge of a research 



organization, rather than a scientist, seems to be worth trying 

The plan for organizing a research department of an in- 
dustrial enterprise depends upon the nature of the enterprise. 
The organization chart (page 66) illustrates a method by 
which all types of research are centralized in one industrial 
research department, consisting of seven interdependent di- 
visions, namely, (i) management research division, (2) sta- 
tistical division, (3) budget division, (4) market research 
division, (5) new products division, (6) development division, 
and (7) plant research division. In a research organization of 
this nature information flows freely along the horizontal struc- 
ture or line of specialized functions, and along the vertical line 
or ordinate of levels of authority. 

Research Conferences. The director of research, directly 
responsible to the president and on the same level of authority 
as other department heads, maintains close contacts with 
major executives of engineering, finance, personnel, purchas- 
ing, manufacturing, and marketing. There should be frequent 
conferences among these executives so that research projects 
and research results may be discussed, bringing to light the 
respective points of view of top executives. This interchange 
of ideas has proven advantageous to those engaged in research 
and keeps executives informed of company research progress 
and makes them receptive to sound new ideas developed by 

It is most desirable that certain research personnel maintain 
close contact with the manufacturing organization so that 
they can obtain first hand information on plant activity, espe- 
cially on those development projects which have been trans- 
ferred to the plant for production. Other representatives of 
each research unit should be required to maintain relations 
with the sales departments to obtain information from major 
consumers regarding the usefulness and effectiveness of the 
company's products. 

Research in Organization. Research in organization may 
grow out of answers to these questions: 



1. Has the principle of centralization of authority been 

2. Is the organization set up in accordance with a definite 
plan, or has it developed in a "hit-or-miss" fashion with 
little or no logical grouping of activities? 

a. Have organization surveys been conducted to correct 
wartime distortions and to adjust postwar changes in 
the volume or nature of operations? 

3. Has the principle of integration been applied? 

4. Are the functions and responsibilities clearly defined for 
each department and division of the business, or for 
individual executives? 

a. Are lines of authority clear and direct? 

b. Does every individual know to whom he reports 
and who reports to him? 

5. Has a chart been made of the organization? 

a. Are there organization manuals containing written 
outlines of all duties? 

b. Has provision been made to keep these manuals up 
to date? 

6. Has the policy of centralizing the management of 
various functions or activities been such as to get the 
maximum benefit from the specialization of personnel? 
Is there any value of some decentralization of manage- 
ment as a means of executive development and of en- 
couraging initiative? 

7. Is there an understudy for every executive position to 
provide for contingencies and to insure continuity? 

a. Has provision been made for locating and develop- 
ing potential executive ability? 

b. Is there a plan for rewarding executives in proportion 
to results secured? 

8. Are committees, or some other practical means, em- 
ployed to co-ordinate all the different phases or activi- 
ties of the company so that the organization operates as 
a team and not as a collection of individuals and inde- 
pendent departments or divisions? 

9. Is the best use made of the "line and staff" organization 
plan as a means of providing specialized staff assistance 
at various organization levels? 



a. Are line and staff relationships and authorities clearly 

10. Has the "junior board plan" been adopted? 

1 1 . Has a separate management research organization been 

a. Is the director a technician or a business executive? 

12. Has the company applied the principle of human re- 

13. Are the key positions in the organization filled with 
well-qualified persons? 

Permanence of Organization. Most businessmen agree 
that any attempt to reduce the operation of an organization to 
a rule-of-thumb procedure usually retards its progress, expan- 
sion, and permanence; these factors must be governed by an 
investigational, experimental, and experiential philosophy of 

Malignancy in Organization. The late Dr. Hans Spemann, 
a German experimental biologist, was convinced that normal 
cells had, what he called, an organizer. But, so far no one has 
found out what this organizer is. 

He further pointed out that cancer cells lacked an organizer 
and grew wild. German biologists, in general, suppose that 
organizers must be definite substances that radiate from a 
center and are convinced that this organizing effect takes 
place in accordance with strict laws so that it can even be 

Business is characterized by similar factors. Those business 
concerns which have an organizer and are properly organized 
usually grow and prosper. Those concerns which have no or- 
ganizer grow like cancer cells, eventually killing the business, 
unless proper management X-ray is administered and manage- 
ment surgery is performed to eradicate the malignant growth 
of duplication of functions and many other extravagant wastes. 

In business, scientific management is the organizer. Manage- 
ment X-ray is managerial research and management surgery 
is the application of the results of research. 


Factors of Product 
and Plant Research 

The Fifth Responsibility of Management. The fifth re- 
sponsibility of management is, to design, test, improve, and 
warrant a product which is to be distributed in relation to 
demand and competition. Both management research and tech- 
nical research play a dominant part in the accomplishment of 
this fifth responsibility. 

Contemporary economists have pointed out that modern 
economic activity is composed of (i) primary industries; (2) 
secondary industries; and (3) personal and professional serv- 
ices. These forms may be resolved into two basic types of 
activity— those which produce something, such as wheat or 
guided missiles, and those which supply a service, such as ac- 
counting, automobile repair, or professional, social, or medical 

Many business concerns, both large and small, are continu- 
ously watching for a favorable opportunity to introduce new 
products to the consumer market. Some of these new products 
are the result of wartime research applied to domestic use; 
others are emerging from laboratories of industry. Regardless 
of how good these new products may be, a certain amount of 
management and technical research must be performed to 
avoid both the expected and the unforeseen difficulties of 
production, distribution, and legal aspects. 




Research on New Product Development. The United 
States Department of Commerce 1 has issued an authoritative 
check list of factors which require thorough study before 
satisfactory plans can be prepared for new production; details 

a. What do you call your new product? 

b. What will it probably be called by the trade? 

c. What is it for? 

d. In what sense is it new? Is it a minor adaptation of some- 
thing you are making; a "standard" product newly added 
to your line, something new to this country but in use 
abroad, an entirely new technical development, or what? 

Reason for Introducing New Product. Have you thought 
out exactly why you want to introduce this new product? 
Are you trying to: 

a. Start a new business? 

b. Start a new line? 

c. Round out your present line? 

d. Expand sales in your present market? 

e. Invade an entirely new market? (for example, export 
market? ) 

f . Getting better or more even use of your men? 

g. Meet the need of your customers? 

h. Exploit an available patent? 

i. Keep up with changing technological trends in your 

j. Counter a new competitive product? 

k. Do something else? 

Testing Proposed Product. 

a. Has your product had controlled laboratory or other 
engineering tests to show up performance? For example, 

1 Adopted from "Check List to Help You Introduce New Industrial 
Products," Economic Series No. 53, Bureau of Foreign and Domestic Com- 
merce, United States* Department of Commerce, Washington, Government 
Printing Office, March, 1946, pp. 1-6. 



if it is a new container, has it received breakage tests in a 
tumbling machine? 
b. Have you fully pre-tested your product under actual 
service conditions? Do you know how it will stand up in 

New Product Appeal. 

1 . If products of this general type are already on the market, 
what features in them appeal most to users and dis- 

a. Capacity or rate of output? 

b. Cost of operation? 

c. Durability? 

d. Ease of repair? 

e. Price? 

f. Service and maintenance? 

g. Compactness? 

h. Appearance and finish? 

i. Trade-in value? 

j. Multipurpose usefulness? 
k. Safety features? 
1. Ease and simplicity of operations? 
m. Others? 

2. What features do present products of this type have 
which users and distributors don't like? For example, 
some plant engineers are biased against certain products; 
some lumberjacks prefer polished axes; some cabinet- 
makers object to single twist type wood bits; some ma- 
chine-tool users prefer to buy tools finished in other than 
standard gray. 

3. How many of these good points and bad points in present 
products of this type are found also in your new prbduct? 

a. Good points? 

b. Bad points? 

4. If there are no products like your new product on the 
market today, why do you think the new product fills a 
need that is not now being taken care of? 

5. Have you fully pretested your product from the point of 
view of customer response? Have you .tried it out on the 
type of people who will use it? 



6. Are you satisfied that your new product is the kind of 
product the market wants or can be taught to want? 

Consumers of New Product. 

1. What industries will use the new product? 

2. Does the product have any possibilities for consumer use? 

3. Can you count on selling it to Federal, state, and local 

4. How many potential customers are there in this country? 

Factors Affecting Markets. 

1. What factors cut down the size of the total market? 

a. What percentage of the potential customers are 
located in sections of the country where there is little 
use for the product? For example, Southern mu- 
nicipalities need little snow-removal equipment; 
industries in natural-gas areas are not apt to buy auto- 
matic stokers. 

b. What percentage will be poor prospects because they 
use smaller-scale, or larger-scale, equipment than you 
produce? For example, bus companies in small towns 
may not be able to use automatic vehicle washing 
equipment efficiently. 

c. What percentage are likely to be out of the market 
because they already have similar products giving 
satisfactory service? 

d. What other market limiting factors, if any, are 
peculiar to the nature of your product, and by what 
further percentages might they reduce the size of 
your total market? 

2. What is the total available number of prospects? 

3. How many of your products would each typical prospect 
normally use per year? 

4. Is the market for your type of product likely to change 
in size during the next two, five, or ten years? 

5. Are there foreign sales possibilities for your product? 

Research on Legal Aspects of New Product. A manage- 
ment research unit should conduct a thorough study of the 
product from a legal point of view to determine the possibility 



of securing patent rights, trademarks, or copyrights; to uncover 
legislation affecting sales and other marketing activities; and 
to reveal the nature of Federal, state, and local taxes on such 

A researcher should proceed with caution when examining 
the patent possibilities of the new product, as parts of it may 
be covered by patents already granted. This is one of the rea- 
sons why legal problems should be solved before making plans 
even for pilot-scale production. Concerns engaged in interstate 
commerce are operating under regulations of the antitrust 
laws, including the Sherman Act, Clayton Act, Robinson- 
Patman Act, Miller-Tydings Act, Federal Trade Commission 
Act, and other Federal acts. 

It is well to remember also the state laws and local ordi- 
nances which regulate certain types of businesses. Many towns 
and cities require licenses for salesmen, under certain condi- 
tions. The manufacture of certain products is prohibited 
within city limits. Most towns and cities have sanitary codes, 
health and safety regulations, and strict building ordinances, 
all of which require examination before money is invested in 
a business venture. 

Research Projects on Legal Aspects. The following is a 
check list on legal and related problems: 1 

1 . Is the new product patentable? 

2. Is its trademark protected? 

3. Are all claims to royalties or other indemnities settled? 

4. Do royalties limit the market for the product? 

5. What patent or similar restrictions, if any, are on the 
production, distribution, sale, or use of the new product? 

6. Are there any such restrictions affecting the production, 
distribution, sale, or use of parts, accessories, or supplies 
that are needed to operate, maintain, or repair the new 

1 Adopted from "Check List for the Introduction of New Consumer 
Products," Economic Series No. 41, Bureau of Foreign and Domestic Com- 
merce, United States Department of Commerce (United States Government 
Printing Office, Washington, D.C., March, 1945)* P- l8 - 



7. Is there anything in the product, its labeling, or its 
advertising which may cause you to become involved 
in possible violation of a Federal, state, or local statute 
or ordinance? 

8. Will codes, trade agreements, etc. restrict its sale in 
certain areas? 

9. Is there anything in the pricing policies, trade practices, 
or selling setup that may involve a violation of Federal 
or other statute or ordinance? 

10. Have local licensing and tax problems been considered? 

11. Has consideration been given to preparing the product 
for shipment? 

12. Has a study been made to determine the relative merits 
of various freight carriers available for moving your 
product to the market? 

13. Should the product be insured while in transit? 

14. Have all the problems of transportation to the market 
or customer been solved? 

15. Are there any labor or union regulations which might 
affect the manufacture or shipment, installation, servic- 
ing, or use of the product? 

16. Will marketing agreements or other industry agree- 
ments in any way limit the production, sales, or use of 
the new product? 

17. Are there any other legal problems, peculiar to the 
product, which must be solved? 

18. Have local ordinances been thoroughly investigated 
regarding the proposed site for production operations? 

Product Research. Along with the study of the foregoing 
factors, management research must be supplemented by pre- 
liminary technical research on the product to ascertain the 
physical properties, materials required, and many other salient 
features of production. 

Product research consists usually of determining: 

1. The physical properties, size, shape, weight, fragility, and 
durability of the product 

2. The most economical overall design 

3. The component parts and their economical design 



4. The most economical and desirable type, quality, and 

quantity of raw materials required to make the parts 
and products 

5. The wisest and most economical method of manufacture 

6. The type and quantity of scrap as the result of operations 

7. The type and number of tests required on parts and prod- 
ucts to guarantee their performance 

8. The amount and type of inspection necessary to warrant 
the product for any given length of time 

Management, in carrying out the implied edict in its fifth 
responsibility, is obligated to conduct the necessary product 
research so that the finished product can be sold successfully. 

An example of the violation of this responsibility is the 
case of a well-known company which built, guaranteed, and 
sold 2 2% -volt radio batteries, the majority of which were re- 
turned to the company as failures due to the neglect of proper 
technical research on the battery container. This error cost 
the company thousands of dollars. 

Research on Product Improvement. The management of 
older concerns is responsible under this fifth responsibility to 
improve the present product or products by means of product- 
development research, which consists of perfecting existing 
products and discovering new or allied products. 

Existing products should be studied from the standpoint of 
selling attractions, such as product appearance, durability, uses, 
selling price, etc. The appearance of a product can often be 
improved by the application of results of style and design 
research. Improving sales appearance by the application of 
research in packaging and wrapping may increase sales volume. 
Cellophane wrappers, for example, have a sales appeal for the 
buying consumer, since they permit visual inspection of com- 
modities under relatively sanitary conditions. 

Research on Competitor Products. A management re- 
search unit is responsible for comparing products with those 
of competitors and subjecting them to rigid tests to determine 
the relative physical durability and construction of the com- 
petitor's items. An alert research unit can utilize the informa- 



tion gained from study of competitive products in development 
and improvement of its own commodities. 

Research on By-products. Product development and im- 
provement research includes seeking new products, new uses 
for old products and by-products, and the utilization of waste 
products. A few examples of newer developments may serve 
to illustrate research accomplishments in this field. Carbon 
dioxide, a waste gas, produced by fermentation of molasses, is 
being solidified, packaged, and sold as "dry ice." Scientific 
research at the laboratories of General Electric Company has 
discovered that "dry ice" can be used to produce rain under 
certain conditions, over a relatively wide area. Petroleum re- 
fineries have converted some by-products to profitable insecti- 
cides. Waste gases from the process of liquefying air were 
utilized in the development of neon light advertising signs. 

Sources of New Ideas. Ideas, as bases for development of 
new products, come from many different sources. Among 
them are a company's research unit, executives, sales repre- 
sentatives, workers, customers, and outside inventors. 

The research unit in conducting its regular activities fre- 
quently develops new ideas which may lead to potential 
products or new applications of present commodities. 

The sales organization is usually one of the prolific sources 
of ideas for new products. Sales representatives are contacts 
between customers and the manufacturer, or between the 
seller and the user. Suggestions from customers and users are 
often the basis for improvement and new products. One ex- 
ample of product improvement can be provided by skilled 
workers in the installation of a new product, aluminum 
shingles. The workers have recommended changes in design 
of shingles, flashing, ridge pieces, and other parts which will 
add to economy of manufacture, ease of installation, and more 
complete protection of the building from the elements. 

Broad-visioned company executives are, of course, fruitful 
sources of ideas and see possibilities of expanding present 
sales line, developing new products, and improving those al- 
ready on the market. Because of daily contacts with key men 



in his and other organizations and the availability of numerous 
types of information, an executive is in a favorable position 
to do creative thinking on products, procedures, and services. 

One should not overlook the plant worker as a creator of 
ideas. He, perhaps more than any one else, sees where changes 
can be made to improve the part or product. The worker lives 
with the material he is producing and is one of the valuable 
sources of usable ideas. Often the workers are unwilling to 
make their ideas known to management because there is little 
or no incentive to do so. The installation of a suggestion- 
incentive system, with liberal financial rewards for accepted 
suggestions, will do much to urge the workers to offer ideas. 

Occasionally new ideas for products are purchased from 
private inventors and private research groups. 

Developing a New Product. A documented idea for a new 
product, accepted by management, is usually subjected to 
certain routine procedures in large concerns. The product- 
development division of the managerial research unit has the 
document dated and witnessed by several persons. Market 
research is responsible for ascertaining, among other facts, the 
number and type of probable competitive products, the sala- 
bility of the proposed new product, and the potential 
customers. Development research is responsible for examining 
any literature pertaining to the product and determining the 
extent of interest of other firms in the idea. Development 
research must determine also the patentability of the idea, the 
design of the new product, and the estimated cost of produc- 
tion. With this and other market information, management is 
in a position to make the final decision. Where the decision 
is in favor of placing the new product on the market, it may 
be necessary to appropriate funds for "pilot-plant produc- 
tion." 1 This is, of course, the ideal method of producing trial 
runs on a new product, as it gives both engineering and pro- 
duction management valuable information on the effects of 
operation on personnel, machines, and equipment. It tells what 
to expect when the product is in mass production, and also 

1 Cf. post, page 128. 



the processes and procedures required to produce a given 
volume of the product economically and efficiently. 

There is always the possibility that pilot-plant production 
may prove the impracticability of a certain method of manu- 
facturing. This means that further research should be con- 
ducted on methodology and product. When the new product 
has been developed successfully, research is required to pre- 
pare the necessary specifications for packing and shipping. 
These specifications should be based on technical (physical, 
chemical, etc.) tests as well as recommendations from the 
market research unit. If the new product is packaged, usually 
these recommendations include such factors as design, style, 
color, and size of package or container. 

During the procedure of introducing a new product, re- 
search acts as a co-ordinator of management, production, and 
sales to assure economy and efficiency of the product. 

The Sixth Responsibility of Management. The sixth 
responsibility of management is to build or secure plant and 
equipment and utilize them economically and effectively. See 
pages 95-102. 

A management, charged with the responsibility of procuring 
plant and equipment for a specified type of enterprise, must 
first determine the nature and characteristics of that enterprise 
through applying the first principle of management and then 
conduct the necessary research to discover the important 
factors which govern the selection of a proper location. 

Location Research. Regardless of the nature of the pro- 
posed business enterprise, the problem of choosing an appropri- 
ate place to establish it is of the utmost importance to the 
success of the venture. Locating a manufacturing business 
presents perhaps more difficulties than locating the usual type 
of commercial enterprise, and its problems will, therefore, be 
used as an example of the far-reaching scope of business- 
location research, inasmuch as the principles involved in such 
a study are applicable to all forms of economic activity. 

Because research sows the seeds of the future, the possi- 
bility of locating the manufacturing plants of tomorrow 



underground becomes more and more of a reality. The finest 
land and top soil are thus conserved for the propagation of 
vegetation which may be the raw material of the power-driven 
giants of tomorrow's economy. 

As man consumes more and more of the earth's basic raw 
materials, which have been processed by nature through the 
centuries, the need of synthetic products from animal and 
vegetable matter as substitutes for raw materials becomes in- 
creasingly great. Sea-water reclamation projects, through 
which certain basic metals are procured, are one of the largest 
sources of metallic magnesium. Petroleum, coal, and iron are 
but a few of the basic raw materials which are being slowly 
consumed and which cannot be replaced by nature for many 
thousands of years. It may not be too imaginative to conjecture 
that the scientists of tomorrow will obtain heat energy from 
the earth's core to produce the motive force to drive these 
underground production centers. 

Underground Manufacture. With the perfection of arti- 
ficial illumination, air-conditioning, refrigeration, pressure 
drainage, and atomic energy, it is possible to envisage that 
plant-location research will ratify the placing of the manu- 
facturing plants of tomorrow's economy deep underground. 
Prewar research enabled the British and the Germans to locate 
large munitions plants beneath the earth's surface, invisible to 
hostile aircraft and safe from bombing and shellfire, yet af- 
fording perfect working and living conditions for thousands 
of employees. Undoubtedly, before any mass attempt is made 
to put production lines beneath the ground, there are still 
many problems to be solved regarding underground construc- 
tion—methods of ventilation, sewage and waste disposal, 
lighting, refrigeration, smoke and exhaust-gas disposal. Yet 
it is quite possible that the aeronautical passenger of the future, 
approaching a city, may no longer see unsightly factory 
buildings dotting the landscape. He will see only green fields 
under which research has hidden the great manufacturing 
industries of tomorrow's economy, 



Location Research. Location research, as applied to manu- 
facturing concerns, consists of scientific investigation and 
study of such factors as proper geographical location, availa- 
bility of adequate land, availability of plant services, and many 
other factors which govern plant location. Management's de- 
cision to locate its enterprise in a particular place may have 
far-reaching effects on the business, as such a decision per- 
manently allocates large amounts of capital for plant and 

Industrial Location Exploration. In a recent survey 1 
conducted by the Industry Analysis Section, Office of Do- 
mestic Commerce, it is pointed out clearly that the field of 
industrial location is relatively unexplored. Other phases of 
business economy have long been the subject of detailed in- 
vestigation, and much information on them has been made 
available. The location of a plant— and, in fact, of the industry 
as a whole— has a decided bearing on the cost of the product 
from the time the raw materials are assembled until the finished 
item reaches the ultimate consumer. Yet the amount of research 
currently expended to ascertain the motivations for industrial 
location is only too often inadequate. Few of those to whom 
the problem is of interest are in a position to study intensively 
its many ramifications. 

Analysis is complicated by the fact that there appears to be 
no optimum location for any particular industry. The various 
factors that influence its geographical distribution are con- 
stantly changing. Shifts in the locational pattern of any in- 
dustry are affected only to a small extent by the actual 
transfer of the equipment and personnel of a plant from one 
place to another. Such changes come about mainly through 
the expansion of the industry in new and more favorable loca- 
tions and its gradual decline in old centers, owing to insol- 
vencies or to obsolescence and failure to replace equipment. 

1 Adopted from Domestic Commerce, United States Department of Com- 
merce, United States Government Printing Office, Washington, D.C., June, 
1947, Vol. XXXV, No. 6, pp. 28-32. 



The major active part in locational change is played by busi- 
ness executives when they decide on the location of new 

Factors Governing Location. Agricultural, fishing, mining, 
and other similar activities are necessarily located close to their 
resources. The service industries, retail trade, and construc- 
tion work usually follow the geographic pattern of population 
or markets. But the location of manufacturing industries is 
determined by many factors that vary in importance with 
each particular industry. 

The clay products, canning, cotton ginning, cement, and 
other such industries that use heavy, bulky, or perishable 
materials and produce a relatively light, compact, or non- 
perishable product are oriented toward the sources of their 
materials. Products which are heavy, bulky, or perishable 
relative to the materials which must be transported to make 
them tend to be made near their markets. Under this classifi- 
cation would be found beverages, containers, most building 
materials, and style goods of all kinds. Heating, and many 
types of chemical and metallurgical operations, such as the 
making of aluminum, magnesium, caustic soda, and chlorine, 
are oriented to cheap-fuel or electrical-energy sources. Plants 
for textiles, garments, machine tools, and those industries re- 
quiring special skills tend to locate near appropriate sources 
of labor. 

Most industries, however, cannot, thus, be conveniently 
tabled by means of a dominant location factor. There are 
relatively few industries in which one factor outweighs any 
other. One of these few is ship construction, which must be 
located on a coastline or waterway. In selecting a location for 
most industries, a wide scope exists for the exercise of judg- 
ment and discretion. To arrive at decisions that result in loca- 
tional shifts, business men should have access to information 
that will serve as criteria. 

Analysis of Location Factors. Usually, the first step in the 
analysis of the geographic pattern of industry is an enumera- 
tion of the location factors. These include accessibility to the 



markets, to raw materials, and to fuel and power, the cost of 
labor, rents, taxes, subsidies, and so on. A comprehensive 
analysis of these and many other factors and their possible 
effects on the industry under survey should follow. However, 
the technique used to measure their relative importance often 
is faulty and misleading. For example, to emphasize the fea- 
tures of the characteristic locale of the industry as the domi- 
nant locational factor is unreliable. In most cases the real 
reasons for location cannot be deduced merely from the facts 
of distribution, and questionnaires sent to firms in the industry 
do not always produce the true picture. Some respondents 
may assign undue importance to items that bulk largest in 
total cost, regardless of whether the cost of these items may 
be definitely affected by a change in the location of the plant. 

The relative magnitude of different items in the cost bill 
of the average plant is commonly used as a rough measure of 
the relative importance of locational factors. This is useful as 
a preliminary determination of the most important factors, but 
may not necessarily stand by itself. Only detailed analysis will 
indicate whether these factors actually are variable according 
to location. 

Another method uses cost of transportation; that is, it 
measures the importance of accessibility to material sources 
and to markets by the amount spent for transportation. This 
method often exaggerates the locational importance of those 
materials which would require a long-distance haul. It may 
well happen that the really dominant material involves the 
least expenditure because the plant has been so located as to 
minimize or eliminate that item. This method also ignores the 
fact that production techniques can be varied to use more of 
the relatively cheap materials and services at a certain location. 

Unfortunately, it is impossible to formulate a completely 
accurate evaluation of the relative importance of various loca- 
tion factors affecting an industry, or even an individual plant. 
But, a comprehensive historical and analytical investigation 
of an industry— one that takes into consideration nonpecuniary 
factors as well as cost data— should give a reliable estimate. 



Faulty Analysis. The industrialist in search of the best 
location for his plant faces the problem of selecting a spot 
which will enable him to assemble materials, process them, 
and deliver the product to his customers at a minimum cost 
as well as a suitable profit. Usually an analysis is made of the 
relative importance of each firm's production and distribution 
requirements and the cost of meeting them at various possible 
locations. The results of analysis, however, are often faulty 
and misleading, largely because reliable information is unavail- 
able or else obtainable only through a costly survey. 

Much more is needed than information on production and 
distribution costs at various locations. For example, compre- 
hensive research, through analysis of the locational factors, 
will determine the effect of current changes, such as wartime 
shifts of population, recent technological improvements, and 
discovery of new materials, on the geographical pattern of an 
industry as well as the effect on the competitive position of 
an individual plant. Such information, if available, would 
benefit not only individual enterprise and entire communities 
that hope to draw industry but also the nation at large 
through the more economic and efficient use of plant, labor, 
and materials. 

It is practically impossible to prepare an all-inclusive list 
of those factors pertaining to the initiation of and location of 
a business. As a general rule, each type of enterprise has 
location factors peculiar to itself. 

Research Projects on Plant Location. The Bureau of 
Foreign and Domestic Commerce has conducted a number of 
surveys on the initiation and location of business enterprise 
and has published its findings in the form of a comprehensive 
list 1 of factors requiring research. An examination of this list 
may aid the competent investigator to select, for intensive 
research, those factors which are significant for the specific 
problem, whether his proposed plant be above or below the 

The character of the proposed site merits careful research 

1 See Appendix A. 



as to city, suburban, or rural location; each offers decided 
advantages and disadvantages to the various types of enter- 

City Location. Relative advantages of city location are: 

1. Availability of rail, truck, water, and air transportation 

2. Supply of labor usually adequate 

3. Service industries usually plentiful 

4. Banking and financing facilities available 

5. Possible local market for product 

6. Educational and social facilities available 

7. Public improvements 

Disadvantages of city location are: 

1. Land prices relatively high 

2. Scarcity of suitable land sites 

3. High taxation 

4. High labor costs and high living costs 

5. Local ordinances governing industry 

Rural Location. Rural and small-town sites offer the 
greatest advantages to big concerns which require a large tract 
of land at a reasonable price, with low-tax assessments. This 
type of company is usually independent of other industries 
and is capable of developing its own industrial city. 

The results of plant-location research should furnish man- 
agement with one or more tentative geographical locations 
where the business can be profitably established. 

Research on Factors Governing Specific Location. The 
next problem confronting management in the endeavor to 
fulfill the requirements of this sixth responsibility is to secure 
plant and equipment. Management research will examine two 
important alternatives before making a decision: (1) con- 
structing a new plant or (2) purchasing or renting a plant 
already constructed. The numerous advantages and disad- 
vantages of each course must be examined from many points 
of view, depending on the nature of the enterprise and on 
the capital available. 



Determination of Equipment Requirements. Research to 
find the type and number of machines required for a definite 
class and volume of production should include: 

1. Analysis of the product drawings and specifications to 
determine the type and quantity of raw material required 
to make each product 

2. Determination of the volume of production necessary for 
a given period 

3. Determination of the machine operations, processes, and 
assemblies and their sequence necessary to produce each 

4. Estimate of the economical run or lot for each part and 

5. Selection of the machine best suited, physically and eco- 
nomically, to perform the essential operations. The num- 
ber and type of machines will depend on the capacity of 
each machine, available machine time, and the volume of 
production demanded. Usually standard machines are 
less expensive than specially built machines. 

6. Determination of requirements for other equipment, 
such as tools, jigs, fixtures, gauges, patterns, templates, 
and other appliances 

7. Analysis of the flow of productive materials through the 
plant, based on the economic sequence of operations, in 
order to determine the desirable type of equipment for 
handling material which should be installed to relieve 
labor of this burdensome task and also to increase pro- 
duction and reduce cost (Handling materials by gravity 
is economical.) 

Research on Plant Layout. After the management research 
unit has made a tentative selection of machines and equipment, 
a plant layout is prepared. This is based on the economic flow 
and volume of production, with the minimum amount of 
hand-handling, providing a continuous, or if necessary an 
intermittent, flow of materials and parts by the shortest possible 
route to the production line. 

Provision must be made in the layout for auxiliary equip- 
ment, such as air-conditioning, blower fans, pipe lines, lighting 



facilities, etc. Space must be assigned for storage, aisles, wash- 
rooms, service activities, and other auxiliary facilities. 

The foregoing merely suggests the nature of the research 
which must be performed in determining, first, the require- 
ments for machines and equipment and second, for the build- 
ings or plant. If management is erecting a new plant, the 
prepared and established plant layout provides a basis for 
constructing the proper types of plant buildings. But, if a 
building is being purchased or rented, then the layout must 
be modified to suit the structural conditions of that building. 

Research on Types of Buildings. The type of building, 
its structural features, and its size are usually premised on: 

1. Nature of the business 

2. Type of processes and equipment required 

3. Volume of production to be manufactured 

4. Physical features of the site and its geographical location 

5. Climatic condition of the area 

6. Value of the land 

7. Economy of moving materials 

8. Centralization or decentralization of the plant 

9. Permanency of structures 

With these and other factors as his working hypotheses, an 
architectural research engineer should design the type of build- 
ing best suited for manufacturing the proposed product. 
Usually, types of buildings are classified according to the 
number of stories above the ground level and the type and 
construction of walls, floors, and roofs. 

The single-story building may be more desirable where 
land is inexpensive; and where acreage can be obtained for 
possible plant expansion; where the manufacturing equipment, 
raw materials, and finished products are heavy and demand 
solidity of floor areas; and where the required floor areas are 
greater than 100 feet in their least dimension. The single-story 
building is more applicable, where natural light and ventilation 
are required for manufacturing operations. This type of build- 
ing seems better suited for work of a hazardous nature; for 



work, where operations require the use of chemicals, furnaces, 
and large quantities of water. This particular type of building 
is more adaptable to flexibility for plant-layout. 

The multistory building may be more appropriate for opera- 
tions where land is expensive, where materials and products 
are relatively light and can be transported vertically from floor 
to floor in process of manufacture, and where freedom from 
street and yard noises is desirable. 

As a general rule, the cost of construction of multistory 
buildings per useful square foot is greater than that of single- 
story buildings, while maintenance costs are usually less in 
the multistory construction. Large manufacturing concerns 
find it desirable to use a combination of both types of buildings. 

Research Projects on Building Accessories. Due con- 
sideration must be given to building accessories, such as 

1. Heating, lighting, refrigeration, ventilating, and air- 

2. Power, electricity, and steam 

3. Internal shop transportation and permanent material- 
handling equipment 

4. Sanitation and waste removal 

5. Fire prevention and protection 

6. Plant protection 

7. Water supply 

8. Offices, warehouses, and other special buildings 

9. Railroad sidings and wharfage 
10. Shipping and receiving facilities 

Power-plant Problems. Research in plant construction 
must include an examination of the problem of developing 
power to operate the proposed plant or purchasing such power 
from a public utility company. Among the important factors 
requiring analysis are: 

I. Factors favoring purchase of power. 

A. Initial investment in power plant 

1. Cost of space 

2. Cost of power-plant equipment 



3. Availability of capital 

4. Interest on investment 

5. Fixed charges 

B. Cost of supervision and labor 

C. Rapid progress in power-plant technique 

D. High cost of fuels 

E. Cost of handling fuel and ash removal 

F. Low-load factors 

II. Factors favoring private development of power. 

A. Large quantities of steam or heat required in proc- 
esses and operations 

B. Waste or by-products available for use as fuel 

C. Low-priced fuel available 

D. Public utility services likely to be interrupted 

Plant Utilization Research. The second part of the sixth 
responsibility of management requires the economic and ef- 
fective utilization of plant and equipment. This calls for 
intelligent answers to the following, and other questions perti- 
nent to present plant facilities. 

Proper investigation will supply the needed answers to: 

1. Has careful consideration been given to the location of 
the plant, both now and for the future? 

2. Have present facilities grown to the point where econ- 
omies may result from some decentralization of opera- 
tions in the future? 

3. Is the present building suited to the purpose, with 
particular reference to number of stories; design and con- 
struction; adequacy of light, ventilation, and air- 
conditioning; handling of materials; adaptability to future 
expansion; location on the site; and accessibility to 

4. Has consideration been given to the relative advantages 
of owning or renting the premises? 

5. Is the plant laid out in accordance with a long-range plan 
so as to minimize the cost of subsequent changes? 



a. Are engineering studies made, including template 
layouts on paper, for each proposed change or 

Is the layout designed to relieve congestion, provide 
adequate working space, facilitate supervision, minimize 
the handling and transportation of materials, and obtain 
maximum utilization of present facilities? 
Is money being spent for the purchase of new machinery 
or equipment where it will count the most in terms of 
total cost of the product? 

Are investigations being made of possible economies, 
through the replacement of manual handling and trans- 
porting of materials within the plant by mechanical 

a. Will such material-handling equipment be sufficiently 
flexible to meet changing schedules, variations in prod- 
ucts or processes, etc., and to ensure that savings are 
not offset by changes necessitated elsewhere? 

Research on Protection. 

1. Are the plant and office well protected against fire and 
other physical hazards and against intrusion by unau- 
thorized persons? 

2. Has a plant emergency squad been organized to deal with 
fires and other emergencies? 

a. Does each member of the squad understand his specific 

b. Are practice drills conducted at definite intervals? 

c. Is the management capitalizing on the training re- 
ceived along these lines by employees who were 
members of the armed services during the war period? 

3. Are fire-fighting and other emergency equipment kept in 
good working condition at all times? 

a. Are they subject to regular inspection? 

b. Is full advantage taken of the services offered by 
insurance carriers? 

c. Has consideration been given to the advisability of 
inspection by the city fire and police departments so 
they may be familiar with the plant and equipment? 



4. Are plant housekeeping conditions such as to minimize 
the fire hazard? Are yards and working places free from 
excess waste and inflammable materials? 

5. In connection with the exclusion of unauthorized persons, 
are fences, gates, and windows in good order and ade- 
quately guarded? Is there adequate illumination of yards 
and buildings to discourage prowlers? Has an effective 
system been adopted for identifying employees and 
authorized visitors? Are package passes required for both 
incoming and outgoing packages? 

6. Are adequate precautions taken in handling inflammable 
and injurious substances, particularly as they affect 
facilities, product, and personnel? 

7. Is physical protection backed with adequate insurance 

Research on Plant Lighting. 

1. Is advantage being taken of new developments in indus- 
trial and commercial lighting, both in the incandescent 
and in the fluorescent fields? 

2. Have lighting facilities and equipment been checked from 
the standpoint of general illumination for large-work 
spaces? localized lighting for individual machines? con- 
tinuous strips for assembly and inspection operations? 
adequate illumination for office and engineering depart- 
ments? exterior floodlighting of buildings and yards? 

3. How many foot-candles of light are being furnished at 
the working level of each desk, machine, and work bench 
during working hours for the different seasons of the 

a. Have these been compared with accepted standards 
for that particular type of work? 

4. Are the walls, ceilings, and floors of such a color and 
finish as to reflect rather than absorb light? 

a. Has consideration been given to the merit of certain 
colors and finishes on machines and equipment as a 
means of improving lighting and reducing accidents? 

5. Are lighting fixtures, walls, and ceilings cleaned fre- 
quently to insure maximum return from the electric 
current used? 



Research on Heat and Ventilation. 

1. Does the present heating and ventilating equipment pro- 
vide suitable working conditions and comfort for the 

a. Are facts available regarding actual temperature, 
humidity, and air movement in the various working 

2. Has consideration been given to the effect of atmospheric 
conditions on labor, manufacturing processes, and 

a. Would humidity and temperature control reduce 
absenteeism and labor turnover? facilitate manufac- 
turing processes? improve the quality of the product? 
reduce spoilage? 

3. When planning a rearrangement or installation of new 
equipment which requires air exhaust, are the following 
factors considered 

a. Where the make-up air will come from? 

b. Whether or not the resulting increase in the velocity 
of the air in the work space will cause discomfort to 
the employees? 

c. Whether or not it will be necessary to preheat the 
make-up air during the winter, or cool it during the 

4. Has consideration been given to the effects of installing 
proper air-conditioning units? 

Research on Waste Elimination. 

1. Have necessary steps been taken to build up waste-con- 
sciousness throughout the plant? 

2. Are suggestions from employees encouraged regarding 
waste elimination and spoilage reduction practices? 

3. Are manufacturing materials selected and work laid out 
so as to minimize scrap? 

4. Are turnings and scrap segregated into practical salvage 

a. Is there a distinction made between material to be 
sold and material to be reclaimed and used? 

b. Is scrap disposed of promptly? 



5. Is appropriate use made of centrifuges and filters to 
reclaim oils and compounds from scrap? 

6. Are steps taken to use scrap and waste materials on the 
premises, either as a by-product or in a new product 

7. Is the scrap to be sold baled, packaged, or stacked in a 
manner to facilitate handling and to minimize handling 

8. Are wash-waters from plating operations being analyzed? 

9. In what way are costs of handling scrap disposed of? 
a. Are they charged to sale of scrap? 

10. Have appropriate studies been made on the use and 
abuse of time? Is time wasted because of lack of ma- 
terial; lack of instructions, orders, or specifications; wait- 
ing for work; machine breakdown; power off; waiting 
for tools, inspection, or machine setup; lack of supervi- 
sion; lack of planning; handling material by hand instead 
of by special mechanisms; poor production methods; 
inadequate storage facilities; or any other factors? 

11. Have analyses been made of plant idle space, and equip- 
ment idle capacity? 

12. Have studies been made to determine the extent of waste 
in power generation? 

Research on Power Plant Facilities. 

1. Are power plant facilities adequate for present and 
anticipated-production activities? 

2. Has consideration been given to the many new develop- 
ments in power-plant design, construction, and opera- 

3. Has there been an examination of the power plant by 
professional combustion engineers? 

4. Is the fuel used best suited for the boilers? 

a. Are furnaces constructed so that various types of 
fuel may be used, depending upon market price of 
coal, oil, gas, or other fuels? 

b. Are fuels purchased on heat specifications? 

c. Is fuel weighed, or metered, as used? 

d. Has an examination been made of methods of storing 



e. Is fuel inventoried at regular intervals? 

f. Can waste material be used for fuel? 

g. Are fuel and ash handled mechanically? 

5. Are records kept of the number of pounds of steam 
generated daily? 

6. Are records available showing the pounds of steam con- 
sumed in process operations daily, and the steam used 
for heating building areas? 

a. Can waste steam be used for heating purposes instead 
of live steam? 

7. Are studies made to determine the efficiencies of fur- 
naces and boilers at regular intervals? 

8. Can steam be sold to, or purchased from, near-by 

9. Are automatic combustion control devices utilized? 

10. Are boiler house auxiliaries efficient? 

1 1 . Has due consideration been given to feed water? 

12. Are separate records kept of power-plant operation and 
of maintenance of power plant? Is the cost per pound 
of steam known? 

13. Are records available of the number of Kw-hrs. gen- 
erated daily? Is the cost per Kw-hr. known? 

14. Has an investigation been conducted to determine the 
advisability of purchasing electrical energy at certain 

15. Are load factors and power factors maintained for both 
generated and purchased power? 

16. Can electrical energy be sold to near-by plants or 

17. Can condenser circulating water be used to heat proc- 
esses and building areas? 

18. Has the possibility of using near-by rivers for generat- 
ing electrical energy been explored? 

The solution to the problem of procuring the right type 
of plant and equipment requires management research, based 
not only on the factors stated, but on those relevant to the 
specific business enterprise under consideration. 


Factors of Material 

and Manpower Research 

The Seventh Responsibility of Management. The sev- 
enth responsibility of management is to procure adequate 
supplies of proper materials. A great deal of engineering re- 
search must be conducted on the product by means of analysis 
of the engineering drawings, specifications, and bills of ma- 
terials. Research emphasis must be placed on the selection of 
the best-suited as well as the most economical types of material 
and equipment for the manufacture of each part or product. 
Product analysis, backed by a knowledge of production vol- 
ume requirements, will reveal the minimum and maximum 
quantities of each class of raw materials required by the manu- 
facturing program, thus holding working capital at a level 
commensurate with the company's other assets and consistent 
with the proposed volume of production. Research of this 
nature is of vital importance in establishing a stores policy, but 
such a policy must be flexible enough to cope with market 
and price variations. 

During periods of falling prices, it may be necessary to 
adopt a hand-to-mouth policy of buying; while in periods of 
rising prices it may be desirable to obtain long-term purchase 
contracts. The important problem, from the standpoint of 
research, is to determine ways and means by which to keep 
the flow of production steady and uninterrupted by lack of 
proper materials. 

I0 3 



Research in planning for purchase and use of materials 
should determine the amount of time elapsed between issuance 
of the purchase order and the arrival of materials. This is an 
aid in establishing stores minima and maxima. 

Principles of Purchasing. Scientific purchasing is predi- 
cated upon the application of five fundamental principles: 

1. The economic purchase of a material demands exact 
knowledge of that material. 

2. The economic purchase of a material is based on definite 
knowledge of and intimate contact with all available re- 
liable sources of supply of that material. 

3. Economic buying necessitates definite knowledge of 
price, and price movements, and available quantities of 

4. Scientific buying requires delivery of materials to a speci- 
fied place at a given time. 

5. Scientific buying requires a knowledge of economic 
quantity and when to buy. 

A purchasing department is responsible for buying materials, 
supplies, and equipment on the basis of engineering specifica- 
tions and an intimate knowledge of production and service 

Research in purchasing operations is usually concentrated 
on finding sources of supply, determining availability of ma- 
terials, locating new types of materials, forecasting market 
conditions, and discovering price trends. 

The actual receipt of materials, their inspection, verifica- 
tion, and storage, is normally a function of a production 
control unit. 

To comply with the demands of this seventh responsibility 
of management, a properly organized and well-conducted 
centralized purchasing department should contact reliable 
sources of supply, issue purchase orders, follow up materials, 
and approve vendors' invoices for payment. 

Research Projects on Purchasing. A number of pertinent 
questions may be asked about the purchasing activity, the an- 



swers to which may cause the executive to apply the principles 
of management research for a solution to problems revealed. 

1. Is the responsibility for purchasing all company require- 
ments concentrated in one or more specialists, or is it 
left to the operating executives and department heads to 
negotiate for their individual requirements? 

2. Where there are operations at more than one location, 
is the purchasing of many common items made in such 
a way as to obtain the advantage and economies of 
volume buying? 

3. Is an authorized purchase requisition required for each 

4. Are purchase orders issued for all requirements of 

5. Are the number and variety of items purchased con- 
trolled by a program of standardization and simplifica- 

a. Are these standards enforced? 

b. Must every purchase request be justified? 

6. Are purchases made on the basis of carefully prepared 
specifications and competitive quotations? ' Is a definite 
check made of quality and quantity of goods or services 

7. Are card records made of approved vendors who pro- 
vide a satisfactory variety of supplies? 

a. Is it standard practice to maintain alternative sources 
of supply for critical items as a safeguard against 
emergency situations? 

8. Are suppliers' representatives constantly contacted for 
such information as technological developments, sub- 
stitute or alternative materials and supplies, etc.? 

9. Are purchasing records designed to provide all informa- 
tion needed as regards commodities, vendors, price fluc- 
tuations, delivery performance, etc.? 

10. Is there a system of constant check on commodity 

1 1 . Are the deliveries of purchased materials consistent with 
the requested delivery date? 



12. Is there an adequate follow-up system on purchases? 

13. Does the receiving unit check the quality and quantity 
of incoming materials? 

a. Is a receiving report issued for all incoming material? 

b. Is the receiving report checked by the purchasing 

c. Are incoming commodities inspected? 

14. Does the purchasing department approve bills for pay- 
ment on the basis of the receiving and inspection reports? 

Research on Material Control. The seventh responsibility 
of management implies the safeguarding of materials and con- 
ducting the necessary research to discover a fool-proof system 
to prevent the loss of materials and establish a definite pro- 
cedure for their control. An adequate system of material con- 
trol is premised upon approved material standards, competent 
purchasing, accurate receiving and inspection, safe storage, 
definite issuing on authorized requisitions, efficient recording 
of all transactions, and inventorying at specified intervals or 
establishing perpetual inventory procedure. 

Research, predicated on answers to such questions as those 
listed below, may prove profitable to an inquisitive manage- 

1. Are material requirements determined well in advance 
by competent specialists? 

2. Are maximum and minimum quantities established for 
each material, consistent with varying volumes of pro- 

3. Has the company adequate storage facilities? 

4. Has a ratio between material inventories and capital 
assets been established? 

5. Is the physical organization of stores such as to provide 
economical handling of materials? 

6. Are materials properly classified? 

7. Are inventories adequately controlled from the stand- 
point of both physical storage and accounting records? 
a. Does this enable one to relate the size of stocks and 

storage facilities to changing volumes of business? 



8. Are the number and variety of items carried in stores 
controlled by a program of standardization and sim- 

a. Are efforts made to substitute in-stock items when- 
ever possible for those requiring an additional 

9. Do inventory records reveal how frequently the stores 
are out of essential goods? 

10. Is the rate of stock turnover consistent with volume of 

11. Do stores records reveal the presence of slow-moving 
items of material? 

12. Is there a practical method for identifying and disposing 
of obsolete and unusable items of material? 

13. Are stores rooms located for maximum accessibility and 

14. Are stores under central supervision and control, even 
though physically decentralized? 

15. Is there a systematic method of verifying book inven- 
tories at least once a year by physical count? Is this 
planned so as to interfere as little as possible with 

16. Does the storekeeper demand an authorized requisition 
for all material released from stores? Does he demand a 
credit slip for materials returned to stores? 

17. Are the materials ledgers under the supervision of the 

18. Are records such that receiving department and store- 
room personnel have advance notice of incoming ma- 
terials and can plan for these in advance? 

19. Is the personnel of the stores rooms adequately trained 
in stores activities? 

20. Has an investigation been made of the possible advan- 
tages of perpetual inventories? 

21. Does the chief storekeeper report to the purchasing 
agent, factory superintendent, or comptroller? 

Research on Labor Supply and Supervision. The eighth 
responsibility of management is to maintain a suitable supply 
of labor and to supervise and co-ordinate its efforts. This task 



of management challenges the intelligence, ingenuity, imagi- 
nation, and patience of the most industrious and meticulous 
researchers. It is the application of the organization principle 
of "human requirements.' ' 

A personnel researcher should understand the terms and 
definitions used in industrial relations because the field is rela- 
tively new and constantly changing, and its terminology is 
sometimes loosely applied. 

Research in the field of personnel activities should be con- 
centrated on the development of policies, procedure, and 
performance to improve the status, methods, and results of 
the industrial relations function. Personnel research must be a 
continuous process and consistent with the program estab- 
lished by those responsible for staffing the organization. 
Analysis and evaluation of personal records, and of the in- 
dividual, are the keynote of promotion; actual performance 
by the person on the job is the acid test for appraising such 

Bases for Required Labor. The type of workers required 
is primarily based on the nature of the business. Analyses of 
the products, machines selected for their manufacture, proc- 
esses involved in production, auxiliary services necessary, 
and supplementary labor— all combine to determine personnel 
requirements. Following are the factors which must be con- 
sidered in selecting the type and number of persons necessary 
to produce the required volume of production: 

1. Type of products and required volume of each 

2. Type and number of machines selected 

3. Prescribed processes and procedures of manufacturing 

4. Machines and equipment capacities 

5. Nature of, and time consumed on, each operation 

6. Plant operating time, per day or week 

7. Nature of auxiliary services and supplementary labor 

8. Location of the enterprise 

9. Availability of labor 

10. Personal qualifications of applicants 



A great deal of management research is also required in 
order to establish suitable personnel policies. A personnel re- 
search program should include a thorough study of: 

Legislation and Government Activities: 

1. Labor legislation— federal, state, and local 

2. The National Industrial Recovery Act 

3. The National Labor Relations Act 

4. The National Labor Relations Board 

5. Unfair labor practices 

6. The Fair Labor Standards Act, or the Wage and Hour 

7. The Walsh-Healy Act 

8. The Social Security Act 

9. The Labor-Management Relations Act, 1947 

10. United States Department of Labor 

11. United States Conciliation Service 


1. Organized labor-unions 

2. Types of labor-unions 

3. Character of labor-unions 

4. Objectives of labor-unions 

5. Collective bargaining 

6. Written labor agreements 

7. Closed shop 

8. Open shop 

9. Check-off system of union dues 

10. Handling of grievances 

11. Seniority of personnel 

12. Strikes 

13. Arbitration 

14. Sickness 

15. Vacations 

16. Military service 

Elements of Personnel Policies: 

1. Organizing a personnel department and staffing it with 
capable individuals 



2. Functions of personnel relations 

3. Developing proper personnel policies 

4. Developing collective bargaining policies 

5. Selecting personnel counselors 


1. Determining wage policies 

2. Relations of wage to cost of living and cost of produc- 

3. Wages in the community 

4. Wages in the industry 

5. Wage payment plans 

6. Wage adjustment plans 

7. Developing financial, and non-financial, incentive plans 

8. Profit-sharing 

9. Job differentials 

10. Guaranteed wages 

11. Wage administration 

Employment Activities and Personnel Policies: 

1. Labor supply 

2. Employment activities 

3. Sources of labor supply 

4. Application for employment 

5. Interviewing 

6 Examinations and tests 

7. Development of examinations and tests 

8. Placement 

9. Follow-up of employees 

10. Developing the job evaluation plan 

1 1 . Developing the personnel rating plan; merit and experi- 
ence rating 

12. Labor turnover: cause and effect 

13. Industrial unrest 

14. Industrial peace 

15. Working conditions 

16. Developing the promotion plan 

17. Personnel transfer 

18. Discharge policies 

19. Rehiring policies 



20. Absenteeism 

21. Personnel records 

22. Personnel audit 

23. Training: job, apprentice, workers, foremen, executives 

24. Women employees in plant 

Safeguarding the Personnel: 

1. Personnel health activities 

2. Personnel morale 

3. Safety activities, training for accident prevention 

4. Fire prevention 

5. Police activities 

6. Developing the employee service plan 

7. Unemployment insurance 

8. Stabilizing employment 

9. Group insurance 

10. Credit unions 

1 1 . Suggestion system 

12. Company store 

13. Savings and loan financing 

14. Mutual benefit associations 

15. Recreational activities 

16. Legal aid 

17. Social activities 

18. Medical services 

19. Hospitalization 

20. Developing pension plan 

21. Retirement policy 

22. Dismissal compensation 

23. Procedures for making personnel policies effective 

Research Projects on Personnel Activities. The current 
need for research in industrial relations is definitely acute. The 
experiences and errors of the past must be evaluated in terms 
of the present. A thoughtful business executive can profitably 
utilize the results of personnel research in developing a stable, 
loyal, and industrious working force. 

The ultimate purposes of all personnel activities are to pro- 
mote harmonious relations between the worker and manage- 



ment, to develop satisfied employees, and to promote 
production at a profit. 

In applying the organization principle of human require- 
ments, research looks for appropriate answers to such ques- 
tions as: 

1. Is there provision in top management organization for 
representation of the present personnel viewpoint on 
matters requiring executive action? 

2. Are all industrial relation activities properly func- 

3. Are the functions of personnel administration and labor 
relations centralized in one senior executive? 

4. Are those in charge of personnel activities properly 
qualified to handle their respective duties? 

5. How can hiring techniques be improved so that fewer 
errors in selection will be made? 

a. Are tests utilized in connection with hiring? 

b. Are employment interviews so conducted as to create 
a favorable impression of the company and to put 
applicants at ease? 

6. Is there a plan for "introduction to the job," and is it 
carried out in the manner intended? 

a. Does management provide for the introduction of 
new employees to supervisors and co-workers, for the 
explanation of company policies, rules, and job details, 
and for showing new employees the location of per- 
sonal facilities? 

b. Is the employee manual (or similar literature) up to 
date? Is the information attractively presented and of 
help to new employees in getting them properly 
started on their jobs? 

7. Are pay adjustments, promotions, attendance control, and 
terminations adequately facilitated through existing per- 
sonnel records? 

a. Do these records provide all necessary information 
required by statutes and governmental regulations? 

8. Is each employee whose services may be terminated given 
an opportunity for an interview with a representative of 




1. Are new employees given adequate training in their jobs, 
including systematic assistance in acquiring necessary 
skills and safe work habits? 

a. Are written instructions, or manuals, available for 
reference in this connection? 

2. Is there a retraining provision for former employees who 
have returned to work? 

3. Are employees who are qualified for promotion encour- 
aged and helped to prepare themselves for "the job 

4. Is there a program for developing supervisors in human 
relations, and in general supervisory duties? 

5. Are those responsible for training others given instruc- 
tion in proper training technique? 


1. Is the compensation plan designed to insure fair pay for 
the work personnel? 

a. Are wage and salary schedules based on job analyses 
and job evaluation? 

b. Is the wage scale for similar types of work in line 
with that of other companies in the community? 

c. Do the annual earnings of employees compare favora- 
bly with those of near-by companies? 

2. Does the compensation plan provide an incentive for 
extra effort or increased productivity? 

3. Is there some form of salary administration that insures 
equal pay for equal work and that provides for recogni- 
tion for length of service and merit rating? 

4. Is there a paid vacation plan for hourly wage-earners? 

a. Do its conditions give recognition for service? 

b. Is it as liberal as the plans of other companies that 
compete for labor? 

5. Is there a termination allowance to employees who are 
laid off through no fault of their own? 




1. Are promotions based on merit, length of service, and 
overall value to the company? 

2. Are promotions made on a company- wide rather than a 
departmental basis? 

3. Wherever possible, is it the policy to promote from 
within the company? 

Financial Security. 

1. Do competitors in the labor market offer more in the 
form of group life insurance, sickness and accident 
benefits, medical insurance, hospitalization and surgical 
benefits, and pensions? 

2. Is there a uniform policy, based on length of service, for 
supplementing sickness and accident benefits with salary 
payments, in order to round out the security program? 

3. Is there some plan, such as a credit union, for promoting 
thrift among the employees? 

Health and Safety. 

1. Is provision made for physical examination of employees, 
either periodically, or preliminary to employment? 

2. Are first-aid facilities provided which include medically 
approved modern first-aid equipment and the emergency 
services of an employee qualified in first-aid treatment? 

3. Are accidents investigated? Is previous accident experi- 
ence analyzed as a basis for preventive activities? 

4. Is employee co-operation in on-the-job and ofT-the-job 
safety fostered through employee safety committees and 
meetings, and through such educational material as posters 
and leaflets? 

5. Has attention been given to the effect on health and 
morale of improved working conditions, such as proper 
heating, lighting, ventilation, layout, and clean and ade- 
quate sanitary rest-room and locker-room facilities? 

6. Have steps been taken, through laboratory tests or other- 
wise, to determine whether your employees are exposed 
to harmful or objectionable working conditions due to 
dust, noxious fumes, or gases? 



a. Would an analysis of an air sample from the establish- 
ment reveal ingredients that might constitute an 
industrial hazard? 

Employee Services and Facilities. 

1. Are transportation facilities to and from the plant satis- 

2. Are satisfactory lunchrooms available at or near the plant? 

3. Do employees have proper facilities for athletic and rec- 
reational activities? 

4. Are drinking water facilities adequate and so located as 
to serve employees and conserve time? 

5. Has the policy as regards smoking by employees, either 
on the job or during recess periods, been recently 

Employee Morale. 

1. Do all employees have some degree of personal acquaint- 
ance with the general manager, or, in larger companies, 
with a senior executive? 

2. Are supervisors sufficiently acquainted with each em- 
ployee to know something about his personal back- 

3. Are employees kept informed about basic matters affect- 
ing the company and their jobs? Is consideration given 
to their views before important decisions are made? 

4. Is a report to employees made from time to time on the 
company's operations and progress? 

5. Are. absenteeism and labor turnover lower than in similar 
or near-by plants? 

a. Have these costs ever been estimated? 

b. Have comparisons been made with the experience of 
other plants in the community or industry? 

6. Has consideration been given to the possible advantage of 
music in the plant, or office, during working hours? 

7. Is a company magazine or newspaper published for em- 
ployees as a means of keeping them informed and thereby 
improving their morale? 

a. Has any check been made to learn if this is doing the 
job for which it is designed? 



8. Has any provision been made for employees— particularly 
women employees— to receive sympathetic counseling or 
advice on their personal problems? 

9. Is there some formal procedure whereby employees are 
encouraged to submit suggestions related to the opera- 
tions of the business and the performance of their re- 
spective jobs? 

a. Is there some plan of financial award to employees for 
suggestions accepted? 

b. Is the suggestion program promoted and publicized 
so as to maintain employee interest and participation? 

Research on Owner-Worker Relationships. The ninth re- 
sponsibility of management is to organize and sustain proper 
relationships between owners and workers. This duty can 
aptly be interpreted as the application of management research 
to develop and maintain a philosophy of industrial peace. 
Management's philosophy, in this respect, must be predicated 
similarly upon labor's social and economic requirements and 
labor's willingness to produce, based on scientific job investi- 
gation and time analysis. 

Management would do well to conduct research on the 
basic securities desired by labor, to discover ways and means 
by which to assure the worker of: 

1. Economic security 

2. Health security (as far as possible) 

3. Wage security on a level commensurate with type and 
amount of work 

4. Promotion security, based on ability, workmanship, and 
leadership, instead of on the passage of time 

5. Human security premised on personal association of 
management and labor, and recognition of man's human- 
ity to man 

6. Morale security— the end result of the successful applica- 
tion of the above first five securities 

The theories of labor security will grow into actualities if 
management persists on focusing its lens of research on the 



fundamentals involved. Small ideals have developed into great 
philosophical practicalities, and provisional experiments of 
preceding industrial eras are current factualities. 

However, it might be well to quote from an address by one 
of our outstanding and most respected industrialists: "When 
tool owners and tool users get together in production the tools 
do the lion's share of the work and the employees get the 
lion's share of the pay. This is something that the Communists 
and others who seek power out of popular ignorance by stir- 
ring up envy, discontent, and strife, would like to keep secret. 
... A recent survey shows that 94 per cent of work energy 
behind American production is mechanical energy, that is, 
from tools, leaving 6 per cent for human energy. Last year the 
dividend payments to corporate owners, which constitute 
their only ultimate incentive to supply tools, were between 
six and seven billion dollars. Payments to employees, on the 
one hand, were over a hundred billion dollars. The employees 
got over 93 per cent and the owners less than 7 per cent of the 
cash payments." 

Research on Procedures. The tenth responsibility of man- 
agement is to formulate procedure based upon practical and 
economical methods. To accomplish the provisions required 
by this responsibility, management is compelled to conduct 
research on the control and measuring instrumentalities 1 at 
its disposal. 

All procedure is premised on definite planning, and planning 
is fundamental to control. Research discovers the ways and 
means by which to make planning so expeditious and efficient 
that the purpose may be accomplished economically. 

Procedures and mechanisms which aid management to con- 
trol an enterprise depend upon the nature and scope of the 
business. Even within the same industry, these procedures may 
vary according to the peculiarities of individual concerns. 
Some of the instruments mentioned apply to all types of 
business activity; and their effectiveness is predicated on the 
extent of research performed prior to designing the procedure 

1 Cf. ante j p. 13. 



or system and on the efficiency of application after it is 

The whole principle of profitable procedure is based on 
research to find economical methodology and accuracy of 
performance at a reasonable cost. 

A designed procedure should be analyzed step by step 
before it is put into practice. It should be tried out on one 
phase of operation. If it is successful there, the complete in- 
stallation is a matter of time and cost. After installation the 
procedure should be checked constantly for possible improve- 

One of the most unfortunate and costly errors in produc- 
tion is the installation of an inadequate, unsuitable system of 
control, instigated by an impatient supervisor without proper 

Instruments of Managerial Control. The following an- 
notated list of important instruments, procedures, and systems 
may help a researcher to select for examination those which 
are applicable to his specific type of business and to develop 
them to suit its particular class of production or service: 

1 . Policies 

2. Charts 

3. Manuals 

4. Standards (Among appropriate standards which may be 
utilized are the following:) 

a. A measurement of conditions and a guide for re- 

b. A goal of accomplishment 

c. A medium for comparison 

d. A determinant for uniformity of product, process, 
and procedure 

e. A criterion for simplification 

f. A yardstick for selecting personnel 

g. An instrument for planning 

h. A specification for the six functions of business 
(creation, finance, procurement, personnel, conver- 
sion, and distribution) 1 

1 Cf. ante, p. 63. 



5. Planning procedures, which include: 

a. Research to define the items or events which should 
be included in the plan, and the alternatives possible 
for a successful solution 

b. Research to determine resources and procedures 

c. Research to develop specifications for, or drawings 
of, materials, labor, layouts, methods, etc., for ac- 
complishing the objective 

6. General procedure 

7. Written instructions 

8. Reports 

9. Operating ratios 

, a. Current ratio (current assets to current liabilities) 

b. Quick ratio (cash, receivables, short-term invest- 
ments to current debt) 

c. Inventory position (inventory to current assets) 

d. Inventory turnover (cost of sales to average inven- 

e. Ratio of net worth to debt 

f . Ratio of permanent capital to noncurrent debt 

g. Ratio of sales to receivables 

h. Ratio of sales to inventories 

i. Ratio of sales to fixed assets 
j. Ratio of sales to total assets 
k. Ratio of sales to cost to sell 
1. Cash position 

m. Ratio of notes receivable to accounts receivable 
n. Ratio of cost to make to cost to sell 
o. Ratio of depreciation reserves to depreciable assets 

10. Drawings (mechanical, etc.) 

1 1 . Specifications 

12. Control systems 
a. Records 








Machine recording 





vi. Cost accounting 

vii. Statistics 

viii. Budget 

b. Communication systems 

c. Material control systems 

d. Tool control systems 

e. Equipment control systems 

f. Production control 

i. Routing procedure 

ii. Scheduling procedure 

iii. Dispatching procedure 

iv. Control boards 

v. Motion and time analysis 

vi. Micro-motion analysis 

vii. Job analysis 

viii. Machine analysis 

ix. Operation analysis 

x. Process analysis 

xi. Plant layout 

xii. Machine layout 

g. Inventory control 

h. Quality control 

i. Inspection 

ii. Statistics 
13. Classification 

a. Material 

b. Labor 

c. Systems and methods 

d. Plant 

e. Equipment 

f. Product 

The application of these instruments provides management 
with numerous essential control services. Recorded experi- 
ences of plant activities compared with established standards 
serve to measure efficiency of operators and operations. A 
standard should be created only as a result of deliberate re- 
search. Written reports and records are the media of super- 
visory control. Maintenance of production schedules is 



revealed by control charts, control boards, and records. Cost 
accounting and cost analysis are also techniques for determin- 
ing the efficiency and inefficiency of business operations. 
Accurate determination of operating ratios provides astute 
management with a keen-edged instrument for the dissection 
and constructive examination of financial statements. 

Research on Records and Record Recording. Records, as 
instruments of managerial control, are normally under the 
supervision of an office manager, who is responsible for their 
proper maintenance and care. A profitable source for research 
may be derived from answers to such questions as those in the 
following list. Current business practice answers these ques- 
tions affirmatively. 

1. Is there an executive in the company with specific re- 
sponsibility for office personnel, office equipment or 
facilities, and office methods? 

2. Is the responsible executive kept in touch with latest 
developments in the field of office machines? 

a. Has the practicability of mechanizing certain clerical 
operations been investigated? 

b. Is this situation reviewed from time to time in the 
light of changes in the volume and nature of clerical 

3. Has a check been made on the extent to which present 
office machines and equipment are being used? 

a. Would rescheduling or planning the work make 
machines available for additional applications? 

4. Is there an office methods unit to devise the "one best 
way" for each clerical operation? 

a. Are work simplification techniques employed for the 
purpose of locating superfluous operations or steps, 
duplication of records, and unnecessary back- 

5. Is a check made periodically to learn if all the various 
reports, records, and forms prepared in the office are 
serving a useful purpose? 

6. Has an investigation been made of economies to be 
secured through centralization of office services, such as 



transcription, filing, record duplication, mail and mes- 
senger, communication, etc.? 

7. Are written standard practice instructions used as a 
means of securing uniform procedures when training 
new office workers? 

8. Is there a systematic program for the weeding of filed 

a. Has a record-destruction schedule been developed 
which provides the "period of keep" for each record? 

b. Have the possible advantages of microfilming some 
inactive records been investigated? 

9. Have any steps been taken to improve the quality of 
letters going out from the company? 

a. Is use being made of carefully prepared form letters 
and form paragraphs as a means of facilitating cor- 

10. Is the office laid out so as to get maximum utilization of 
space and efficient flow of work? 

a. Are the number of private offices kept at a minimum, 
and are they located so as to interfere as little as 
possible with light, heat, and ventilation in the gen- 
eral office areas? 

11. Is some form of departmental audit employed for an 
objective review and appraisal of the performance and 
efficiency of each office department? 


1. Has responsibility for insurance matters been centralized 
in the hands of one or more specialists in the company? 

2. Is there some one executive directly responsible for the 
administration of the company's group insurance? 

a. Is he fully informed on the underwriting and operat- 
ing problems involved, and the services available from 
the insurance carrier? 

b. Is the plan being administered and publicized within 
the company so that maximum benefit results from 
the standpoint of good industrial relations? 

3. Are all insurance risks subject to periodic review and 
appraisal to reveal whether or not they are overinsured or 



underinsured, due to changes in wage rates, material 
costs, etc.? 

4. Has a survey been made of all hazards to which the busi- 
ness is subject, with the thought of developing a well- 
rounded, comprehensive insurance program? 

5. Have the insurance policies been examined to determine 
whether or not they give the type and amount of pro- 
tection desired? 

6. Has full advantage been taken of the various rate and 
premium reduction practices available along the lines of 
safety, health, and fire-prevention devices and practices? 

7. Have steps been taken to cushion the shock to the com- 
pany from loss of certain key executives by providing 
so-called "keyman" insurance programs? 

8. Are the records adequately protected against loss from 

Management research produces reliable information on ex- 
perience and activity which can be profitably utilized to 
determine the essential control instruments, statistical mecha- 
nisms, and forecasting devices most suitable for enduring 
control of a specific enterprise. 


Manufacture and 
Market Research 

Patents. During a recent year the United States Patent 
Office issued 21,818 patents. Assuming that the office operates 
on the basis of a forty-hour week and for fifty-two weeks of 
the year, this would mean that on the average one patent was 
issued every six minutes of the work day. 

Most of the inventions for which these patents were issued 
were the result of research in industrial laboratories. 

While the work of individual inventors is of great value, 
naturally the organized industrial laboratory with its many 
experts is more productive in terms of speed and output. It 
would be erroneous to assume that the laboratory is infallible; 
none the less its standards are based on facts obtained through 
meticulous research. To maintain an advanced position in 
competitive fields, a company must depend upon its research 
unit for continuous exploration of the possibilities of the 
future, particularly in the fields of manufacturing and selling. 
An industry neglects research at its own peril. 

"Income appropriated to research is not spent, it is invested," 
according to Dr. Karl T. Compton, president of the Massa- 
chusetts Institute of Technology. 

The Eleventh Responsibility of Management. The 
eleventh responsibility of management is to manufacture and 
sell at a profit. The fields of production and distribution offer, 
to progressive management, limitless opportunities for profit- 



able scientific research. Industrial leaders have demonstrated 
their ability to produce vast quantities of new and useful 
commodities, as well as to render outstanding services to 
modern economic society. Through their inventive genius 
these leaders have promoted technological progress in all 
fields of industry, particularly in manufacturing and distribu- 
tion. They have supplied both the producer and the consumer 
with a tremendous number of new materials and products of 
outstanding merit and usefulness. 

Selling at a Profit. Armed with the "know-how" of man- 
agement research, business administrators are responsible for 
"producing and selling at a profit." During the Second World 
War, and in the postwar period, both manufacturers and deal- 
ers enjoyed the sellers' market, large quantities of consumer 
dollars, and an unprecedented demand for all types of com- 
modities. With a trend toward a buyer's market, research in- 
volving production problems will be relatively easy compared 
with the research required to solve the selling problems. 

With the release of a gigantic number of consumer dollars 
from savings accounts, and a growing tendency to credit 
buying, an extraordinary consumer purchasing power is ex- 
erted on the markets, causing a marked increase of seller 
competition. Enormous pressure will be brought to bear on 
market research to solve these new selling problems. Sellers 
are worried that they must compete with new products which 
may replace those already on the market, and with new ma- 
terials which may make present materials obsolete. 

Research on Technological Development. The person 
directly responsible for research on profitable operations 
should satisfy himself by answering such questions as: 

i. Is the company organized and equipped to keep abreast 
of developments relating to new types of materials, new 
applications of old materials, more efficient machines, 
and new or better manufacturing processes? 
a. Is a research laboratory, or similar facility, main- 
tained, and are one or more technical specialists 
engaged for research purposes? 



2. Are all available sources of ideas tapped for new prod- 
ucts, new applications, new processes, etc., including 
company employees, suppliers, customers and users, and 
independent inventors? 

3. Are executives kept in touch with the many technolog- 
ical improvements that were developed during the war 
emergency and that might be applicable to the business? 

4. Are production and sales organizations adequately tied 
in and co-ordinated with industrial development activi- 
ties so that the special interests of each of these groups 
will be given consideration? 

5. In the development of new or improved products, is 
sufficient consideration given to the type of labor and 
equipment required? 

a. Is it the practice to work toward the utilization of 
standard materials or parts which can be bought in 
the trade rather than being made special? 

6. Is it the practice to work out the "bugs" in a new prod- 
uct or process through trial lots in a pilot plant before 
attempting full-scale production? 

7. Is there adequate control over the cost of industrial 
research activities? 

a. Is the overall amount limited by some form of devel- 
opment budget? 

8. Is the cost accounting procedure designed to develop 
detailed costs on development projects? 

a. Is a reasonably accurate estimate of the cost of indi- 
vidual projects required as a preliminary to authori- 

9. How are the results of industrial research activities 
brought to the attention of the top executives? What 
means are used to insure that these projects receive ade- 
quate consideration from the executives, and that action 
is taken on them? 

10. Has some form of technical library or reference file 
been established as an adjunct to industrial research 

The full value of industrial research laboratories is achieved 
when the scope of their work is broad. Industrial research fre- 


quently concerns itself with problems and potentialities far 
removed from the immediate interests of a given enterprise, 
with the result that the way has been pointed to profitable 
innovations in its present line. 

Capital and New Enterprises. The commitment of capital 
to new enterprises can be undertaken only after thorough re- 
search. Numerous examples of this are available, but probably 
one of the best is offered by a company primarily engaged in 
the manufacture of automobiles which also produces agricul- 
tural equipment, plastics, glass, steel, and many other products. 
Another example is the production by breweries of antibiotics, 
such as penicillin and streptomycin. Although these new prod- 
ucts are not sold in the same market, or in the same manner, as 
the major product, their production is a result of the fer- 
mentation process. 

Manufacturing is the application of research, labor, and 
machinery to products of nature, converting them into usable 
commodities. The current potential demand for goods seems 
unlimited. Numbers of manufacturers are depending upon 
research to solve the problem of further increasing production 
volume, product quality, manufacturing efficiency, and plant 
mechanization, with a resultant decrease in costs. Discrimi- 
nating buyers are looking for quality as well as quantity, and 
alert manufacturers are concentrating research on qualitative 
as well as quantitative production. 

Technical Manufacturing Research. The seeds of re- 
search, properly sown in plant operations, yield manyfold. 
Technical research plays the dominant part in manufacturing 
inasmuch as it deals directly with the product and with 
methods of producing. Technical research is recognized usu- 
ally as the center of industrial research, from which emanate 
other forms of plant research. 

Technical manufacturing research involves painstaking, 
repetitive experimentation, searching for: 

1. New materials 

2. New products 

3. New processes for making the product 



4. Improvement in present processes and procedures 

5. Information to aid executives, engineers, supervisors, 
and sales personnel 1 

6. Ways and means to reduce the cost of manufacturing 
and selling 

7. Ways and means of improving quality 

8. New uses of existing products 

9. New machinery and equipment for plant production 

10. Ways and means to increase efficiency 

1 1 . Recovery of, and new uses for, by-products 

12. Profitable means of disposing of waste products 

These are but a few of the duties of this form of technical or 
fundamental research. 

After fundamental research has been completed, usually 
the data and recommendations are supplied to the engineering 
research unit, where drawings and specifications are prepared. 

Pilot Plant as a Means Testing Research. Research 
work is conducted to discover the most economical and effi- 
cient methods of production. In many cases engineering re- 
search is responsible for initiating the operation of pilot plants 
before the product is placed in general production. 

The pilot plant conserves funds and serves other useful 
purposes. Among these the most important are as follows: 

1. It is an experimental proving ground for developing a 

2. Various machines, processes, and procedures can be 
utilized experimentally, without interfering with regular 

3. Production and design problems may be solved at a 
relatively low cost. 

4. It is a source of valuable information for the production 
and sales departments. 

5. It is a source of facts for new plant construction, if 

6. It serves as a training ground for production personnel. 
1 For methods of presenting this information, see Appendixes C and D. 


7. Products of the pilot plant may be given to customers for 
trial and supplied to engineers for field tests; successful 
field tests usually mean that the product is ready for 
regular production. 

Because of the vital position which the research laboratory 
holds in industry, there is sometimes an unfortunate tendency 
on the part of research personnel to assume unintentionally a 
control of production and operating standards. Such control 
is not within the province of research. Problems which arise 
in maintaining operating standards can quite properly be 
referred to the research laboratory. But it is the task of re- 
search management to limit the time given to the solution of 
factory production problems. Otherwise there may be a tend- 
ency for factory supervision to shun its own responsibilities 
and consume research time in solving routine problems of 
factory production. 

Deliberate research applied to production usually results in 
quality products and more selective buying on the part of the 
purchasing agent. The current demands upon industry, with 
its inherent complexity, make research an integral part of pro- 
duction activity. Production research was originated to aid 
executives and not to criticize their decisions. 

Research on Plant Maintenance. Management research 
into plant operations must be accompanied by comprehensive 
examination of plant services, of which plant maintenance is 
most important. Plant maintenance involves upkeep, restora- 
tion, and preservation of grounds, buildings, and equipment. 
In terms of dollars, it normally represents the largest single 
item of monthly factory expense. The primary functions of 
a plant maintenance unit are: 

1. Plant preservation 

2. Anticipation and prevention of interruptions to produc- 
tion in consequence of faulty equipment 

3. Correction, repair, and restoration of worn or damaged 

4. Installation or removal of equipment 

5. Construction or destruction of certain buildings 



As a general rule the function of plant maintenance is as- 
signed to a division of the manufacturing department, and is 
operated under the supervision of a maintenance or plant 

Principles of Plant Maintenance. The performance of 
plant maintenance is predicated upon the following five basic 

1. Principle of maintenance standards. It is essential to deter- 
mine and establish economical maintenance standards for 
each item of fixed assets. These standards may be used to 
measure the efficiency of maintenance work. 

2. Principle of preventive maintenance. Each fixed asset 
should be continuously inspected for faults, imperfec- 
tions, and depreciation. When discovered, they should 
be reported immediately to the maintenance engineer 
along with an estimate of cost of repairs to, or replace- 
ment of, the equipment. 

3. Principle of maintenance performance. All maintenance 
work should be performed as soon as practicable. 

4. Principle of defining and recording fixed assets and main- 
tenance. It is essential to record accurately each fixed asset 
and the amount of money expended on that fixed asset 
in order to keep it in good operating condition. 

5. Principle of fixed asset efficiency. The original cost of a 
fixed asset should be compared periodically with the cost 
of maintaining that fixed asset. The result of the com- 
parison serves as a determinant by which to measure the 
efficiency and economy of that asset for specified pro- 
duction volumes. 

The theory underlying the application of these plant main- 
tenance principles is based on the premise that proper mainte- 
nance prolongs the profitable life of fixed assets, except when 
obsolescence occurs. 

Systematic inspection and care of fixed assets will tend to 
prevent extensive and expensive breakdowns of equipment, 
which usually cause slowdowns in production or reduce 
productive capacity. To anticipate deterioration or breakdown 


of equipment by inspection and care is definitely better than 
to precipitate disintegration by lack of a proper maintenance 

Research Projects on Maintenance Work. The varied ac- 
tivities of plant maintenance offer a fertile field in which 
management research separates the nourishing wheat of 
competency from the destructive tares of inefficiency. 

The intuitive executive will want intelligent answers to such 
maintenance questions as: 

1. Are all maintenance activities properly controlled? 

2. Is the maintenance program planned to keep buildings, 
machines, and equipment in good operating condition? 
a. Have steps been taken to catch up on deferred main- 
tenance resulting from wartime operations? 

3. Has preparation been made to handle breakdowns ex- 
peditiously either (1) with standby equipment for 
temporary replacements, or (2) with an emergency 

4. Is there a plan of periodic and systematic inspection of 
facilities and equipment that puts the major emphasis on 
preventing rather than correcting trouble? 

a. Is some form of check-list or card record used in 
this connection? 

5. Is maintenance, repair, and overhauling work scheduled 
so as to interfere as little as possible with production 

6. In setting up the maintenance organization, has the full- 
est possible use been made of specialized units, such as 
engineering, plumbing, millwright and carpenter, elec- 
trical, painting, sheet metal and welding units, a ma- 
chine shop, and a unit for new construction? 

a. Is the maintenance force qualified to handle the 
erection of new equipment and rearrangement proj- 
ects as well as regular repair and maintenance work? 

7. Is maintenance given adequate consideration in selecting 
and installing new equipment, even possibly to the ex- 
tent of a larger purchase outlay to secure more eco- 
nomical upkeep? 



8. Are materials, finishes, and surfaces selected that are 
easy to keep clean and to maintain in good condition 
when erecting new or changing existing facilities? 

9. Is there a separate maintenance parts and supplies stores 
room? Are records kept of maintenance supplies? 

10. Is the maintenance personnel encouraged to suggest 
changes or modifications in the design of machines or 
equipment that will increase operating efficiency, reduce 
liability of breakdown, and decrease maintenance costs? 

11. Are maintenance costs budgeted and controlled in a 
systematic manner? 

a. Are cost estimates and written authorizations required 
in advance for specific projects? 

12. Do the records reflect the amount, frequency, and cost 
of repair and maintenance for individual structures or 
pieces of equipment? 

a. Is such information used as a guide in determining 
the economical disposal or trade-in point? 

13. Have the possible advantages of contracting with out- 
side agencies for certain forms of maintenance work 
been investigated? 

14. Has a ratio of maintenance expense to cost of equip- 
ment been established? 

Product Quality Research. As a service function of pro- 
duction, inspection is responsible for quality control or, in 
some cases, for certain aspects of it. The difference between 
inspection and quality control is one of degree and application. 
In the small enterprise inspection is quality control. In the 
large corporation quality control— a function of management- 
is the statistical application of information gained as a result 
of adequate and efficient inspection to control quality of 
workmanship and product. 

The maintenance of product quality is founded on three 

1. The quality of a product is contingent on the quality of 
the integrant materials and the skill and accuracy of the 
labor required to make that product. 


2. The relative perfection of a product can be secured only 
through constant examination, definite comparisons, and 
accurate measurements. 

3. The cost of quality control is directly proportional to 
the degree of precision required, the amount of examina- 
tion essential, and the caliber of the inspection labor as- 
signed to the task. 

The Inspection Unit. Normally an inspection unit is a di- 
vision of the manufacturing department, under the direct 
supervision of a chief inspector. Its work consists of comparing 
materials, products, performance, and workmanship with 
specified standards, accepting those which are within the 
limits, rejecting those that are not, discovering causes for 
rejects, and recommending ways and means for eliminating 
these causes. 

There is usually a conflict between production quantity and 
production quality, resulting first from the operation of the 
economic law of supply and demand, and second from the 
application of wage incentive systems. As demand becomes 
greater than supply, management may sacrifice quality for 
quantity. When supply exceeds demand, there is a tendency 
for buyers to select quality goods. 

Usually wage incentive plans are premised upon increase in 
volume of production during a specified time, and thus there 
seems to be a natural tendency for a worker to overlook 
quality in his enthusiasm to produce quantity. Strange as it 
may seem, both major causes for conflict between quantity 
and quality production are predicated on the same goal, i.e., 
the dollar. 

Purpose of Inspection. Inspection— a factor in producing 
commodities— varies within an industry. Each company de- 
termines its own standard of product quality and formulates 
its own inspection policies based on quality desired. Uni- 
formity in inspection procedure is difficult to find. 

The process of inspection is founded on fundamental prin- 
ciples derived from theories basic to all classes of inspection. 
The primary principles of inspection are: 



1. Principle of quality standards. A definite standard or 
criterion must be developed and established for each ma- 
terial, part, operation performance, and product, with 
limits reasonably close to perfection consistent with the 
type and nature of the product. 

2. Principle of comparison. The object or performance 
must be compared or measured with the designated 
standard or criterion. 

3. Principle of performance. The act of inspecting requires 
the use of intelligent and consistent judgment in formulat- 
ing a decision to accept or reject an object or workman- 
ship, based on its similarity to the established criterion 
and within the specified limits of the standard. The pur- 
pose of all inspection is to secure quality. Where quality 
fails to meet the specified standard, an inspector must 
discover the cause and recommend remedial measures or 
bases for the abolition of the source of defects. 

4. Principle of quality control. The scientific and systematic 
use of recorded, verified inspection experience is a 
powerful and profitable implement for controlling 

In larger concerns inspectors are required to submit daily 
reports of the results of their inspections. These include causes 
for variations from standards, reasons for rejections, identifi- 
cation of machines and operators involved, and suggestions 
for remedy. A statistical analysis of these reports forms the 
basis for quality control. Inspection serves as an agent for 
identifying and interpreting the causes of variations. 

Management Research. Management research should de- 
velop methods for appraising inspection activities and 
determining procedures for utilizing end results of inspections 
to control quality of performance and products. Research in 
the field of inspection may provide management with an ac- 
curate perspective of the efficiency of supervision, workers, 
and production as a whole. It should bring to light such 
factors as incorrect materials, supplies, and specifications; im- 
proper machines, methods, and operations; poorly trained 


operators, foremen, and inspectors, and other inefficiencies 
that may exist. 

Analysis of "sales returns" to discover cause is a profitable 
phase of management research. 

Research Projects on Inspection. Answers to such ques- 
tions as are listed below may cause an executive to require 
research in the field of inspection activities: 

1. Where in the organization is responsibility placed for 
controlling the quality of products and services? 

a. Is it centralized in an inspection division? 

b. If so, is this setup sufficiently independent of shop 
supervisors to insure an objective approach? 

2. Is the inspection work organized so that defective ma- 
terials or unsatisfactory workmanship will be discovered 
as early in the production process as possible? 

a. Is there provision for floor inspection and gauging 
"on the job" as a means to this end? 

3. Is "work-in-process" inspected between shifts and be- 
tween moves from one department or operation to 
another, in order to localize responsibility for defective 
work and to interfere as little as possible with operations? 

4. Is it current practice to require foremen or supervisors 
to check the first few pieces produced on each lot to 
insure proper machine adjustment, etc.? 

5. Is the fullest possible use being made of mechanical ap- 
pliances and precision devices so as to expedite the 
inspection processes and to reduce the dependence on 
personal judgment and opinion to a minimum? 

6. Are inspection gauges, meters, scales, and other measur- 
ing devices checked at frequent intervals? 

7. Are formal inspection reports issued, and are they 
analyzed to identify the causes of unsatisfactory results? 

Tool Research. Tools are vital to industrial production and 
must be purchased or made by the concern using them. A 
tooling unit of a manufacturing enterprise is normally a service 
division of the manufacturing department. It renders im- 
portant service to production operations and is responsible 
for the manufacture of certain special tools and machines 



designed by the engineering staff. It is also responsible for the 
classification, storage, issue, maintenance, and reconditioning 
of plant tools. 

In exploring the work and responsibilities of a tool room, 
management research should focus its telescope of inquiry on 
the myriad varieties of tools and materials so as to develop 
ways and means of preventing capital from being unnecessarily 
tied up in tool inventory. 

The conduct of tool research is particularly advocated in 
the smaller manufacturing enterprise, because a tool room 
may be a prolific source of waste. The following factors 
should be outstanding topics for conscientious management 
research examination: 

. i. Tool requirements based on analyses of engineering 
drawings, specifications, production equipment, proc- 
esses, operations, and volume of production 

2. Tool developments (new tools and tool inventions) 

3. Relative economy of standard and special tools 

4. Quantity of product which a tool will produce eco- 
nomically (economic run) 

5. Application of statistical methods to tool use (perform- 
ance, service, and life of tool) 

6. Tool efficiency 

7. Tool damage and breakage in relation to quantity of 
production and class of operators 

8. Type and nature of tools in relation to amount of scrap, 
defects, and rejected products 

9. Cost of making versus buying tools 

10. Tool performance in relation to cutting fluids used 

1 1 . Tool inspection and maintenance 

12. Tool classification and accountability 

13. Tool storage and protection 

14. Methods of controlling perishable small tools 

15. Personnel of tooling division 

16. Records kept by tooling division 

17. Cost accounting for tool control 

18. Tool inventory and its relation to total inventory value 
of fixed assets 


19. Tooling division operating expense in relation to the 
value of the services rendered 

20. Space and cost of space occupied by tooling division in 
relation to space involved in productive operations 

Good tools for machine use are expensive and are frequently 
more costly than the machine itself. Management research is 
responsible for keeping tool investment at a level consistent 
with the quality and quantity of production. 

Fundamentals of Production Control. The production 
control division is a service unit of the manufacturing depart- 
ment, actively engaged in planning and controlling production 
requirements, and is founded on the following fundamentals: 

1. Product analyses 

2. Machine and tool analyses 

3. Operation and process analyses 

4. Material control 

5. Material handling activities 

6. Routing each item of production 

7. Scheduling production activities 

8. Dispatching work at specified times 

9. Time and motion analyses 

10. Establishing piece rates 

11. Operations layout 

12. Quality and quantity standards 

Research in the field of production and its affiliated activities 
includes investigation of all factors embodied in this function. 
Management research should determine: 

1. The best combination of machines, operations, and condi- 
tions to produce commodities economically at a specified 

2. The most suitable, economical, and profitable layout of 
plant operations 

3. The fastest and most advantageous economical methods 
of handling materials and products through the plant 

4. The most appropriate and accurate recording and con- 
trolling devices 



Research on Production Control. Interested executives 
should obtain correct answers to the following questions on 
production control. They reflect current business practice. 

1. Is the production control system designed specifically 
for the needs of the plant? 

a. Does it serve to make full use of available men and 
machines, permit advance planning for labor and 
materials, and provide for the follow-up of work in 

2. Does it include centralized scheduling, routing, and 
dispatching of work through the plant? 

3. Does it provide an up-to-the-minute picture of the status 
of work in process at any time? 

4. Does it make possible the scheduling for completion and 
delivery dates with reasonable accuracy? 

5. Is it designed to reveal where production bottlenecks 
are likely to develop? 

6. Are current statistics received on idle men and machines 
as an index of the effectiveness of the production 

7. Can fluctuations in factory operations, either seasonal or 
otherwise, be leveled off by better production planning? 

8. Is the production planning and control well co-ordinated 
with purchasing, stores, and personnel requirements? 

a. Are power needs anticipated? 

9. Is a planning board or some other graphic or visual 
means employed for viewing the progress and status of 

10. Are production records designed to reflect the perform- 
ance of individual workers, machines, and departments? 

11. Does the production control system serve to give man- 
agement advance information on probable available 
plant capacity or on changing rates of operating activity 
so that these can be planned for in an orderly manner? 

Material Handling— a service rendered to all manufacturing 
operations— generally considered is a section of the production 
control division. Its activities are governed by the application 
of eight basic principles: 


1. Economy in moving materials is secured by shifting them 
only when absolutely necessary. 

2. Materials should be transferred by the most direct, ex- 
pedient, and economical methods or mechanisms. 

3. Changing place utility of materials does not increase their 
monetary value but does increase their costs. 

4. The transfer of materials should be specifically timed to 
conform with production schedules. 

5. Movement by gravity is normally the most economical 

6. Investment in material handling equipment must be com- 
pensated by increased production efficiency or reduced 
operating costs. 

7. The act of transferring material should be accomplished 
in unit loads as large as possible, consistent with its type, 
size, weight, and nature. 

8. Mechanical handling of materials is usually more eco- 
nomical than manual handling. 

An examination of the principles of material handling is 
sufficient to show the vast amount and variety of research 
which may be conducted in this field. There is plenty of op- 
portunity for an alert management to save a company con- 
siderable time and expense and to secure more precise and 
economical utilization of plant and equipment by instigating 
research investigation into the activity of transferring ma- 
terials, parts, and products. 

Research Topics on Material Movement. Answers to the 
following questions may be the source of profitable material 
handling research: 

1. Has a study been made of all material-handling opera- 

2. Are materials moved from one operation to another 
without manual handling? 

3. Are materials so placed as to avoid unnecessary motions 
of the machine operator? 

4. Are material-handling operations accurately tied in with 
production-control activities? 



a. Is the material-handling unit a part of the production 
control division? 

5. Have adequate studies been made of plant layout? 

6. Are plant operations so arranged as to give the greatest 
efficiency in handling parts and products? 

7. Has the factor of material-handling and internal trans- 
portation been given adequate consideration in planning 
the layout and equipment of the plant? 

a. Are aisles and passageways wide enough to permit 
the movement of products and materials by mechan- 
ical-handling devices? 

b. Is there sufficient clearance in aisle widths and be- 
tween machines to provide protection to employees 
when materials are being trucked through? 

c. Have steps been taken to eliminate sharp ramps and 
blind corners in truckways? 

8. Is instruction given to new employees in the art of 
handling materials? 

a. Are employees informed on the use of signals for the 
movement and handling of traveling cranes, and on 
the use of slings, ropes, chains, and special devices 
for handling heavy or hazardous materials? 

9. In the selection of tote boxes, are their size and shape 
adapted to facilitate piling or stacking at the work place, 
in the storage areas, or on pallets or skids? 

a. Are the skids or pallets the proper size and type to 
permit the tiering of tote boxes or material handled? 

b. Are compartment-type trays used for the selec- 
tion and transferring of component parts needed in 

10. Is it possible to combine operations to obtain economy 
of handling? 

11. Has the possibility been considered of using a gravity 
conveyor between floors instead of other methods of 

12. Has an examination been made of the types of material 
handling equipment? 

13. Has a comparison been made of the costs of manual 
handling and mechanical handling? 

14. What is the cost per ton foot of moving materials? 


15. Has a study been made of loading and unloading opera- 
tions for the purpose of determining economical han- 
dling procedure? 

16. Is scrap moved by mechanical-handling equipment? 

Manufacturing operations should be conducted by a prop- 
erly organized manufacturing department, with adequate 
facilities and a staff of competent individuals. The result of 
manufacturing operations should be measured carefully with 
well-balanced criteria and all deviations from the criteria or 
standards should be subject to critical analysis by the research 

Sell at a Profit. This eleventh responsibility of manage- 
ment also requires that the product be sold at a profit. The 
science of distribution, or selling, includes all activities neces- 
sary to move commodities from producer to ultimate con- 
sumer, which of course involves many complex problems. 
These selling problems should be subject to discriminative 
market research. 

Accurate and comprehensive market analyses are necessary 
to consummate initial sales, to secure repeat orders, and to 
avoid replacement by competitive products. 

Market Research. 1 The manufacturer of consumer goods 
seldom escapes the necessity for careful market research. It is 
a continuous process throughout the life of the enterprise, as 
there is an urgent need for constant compilation of current 
market data and periodic but intensive surveys of marketing 

Scientific marketing usually embodies market research and 
market forecasting; the formulation of definite market policies 
as to the product, price, trade channels, dealers, and consumers; 
the effective and economical direction and control of personal 
salesmanship; and the effective and economical direction and 
control of advertising. 

Market research provides ( 1 ) the basic factual information 

1 Adopted from the writings of Dr. G. Rowland Collins, Dean of the 
Graduate School of Business Administration, New York University, with 
his kind permission. 



upon which marketing policies are formulated; (2) the basic 
factual information for specific marketing campaigns; (3) data 
for analysis and evaluation of the effectiveness and economy 
of specific marketing methods and operations; (4) the neces- 
sary statistical information and opinion for accurate market 
forecasting; and (5) the data and analysis necessary to the 
co-ordination of factory production schedules with carefully 
determined profit-making sales possibilities on a low total cost 

The whole range of marketing policies— concerning the 
product line, prices, trade channels, dealers, and customers- 
should be based upon deliberate research information which is 
both comprehensive in extent and accurate in individual de- 
tails. Any process of formulating market policies must be 
predicated on the fact that consumers' demands are dynamic 
and changing. Research must gather all the essential quanti- 
tative facts with respect to the number, geographic distribution, 
and economic status of present and potential customers. In 
addition, it must gather qualitative data concerning the pref- 
erences, habits, customs, buying motives, and resistances or 
prejudices of customers and prospects. Both types of informa- 
tion are necessary, because willingness to buy is just as im- 
portant to the manufacturer or distributor as is the ability to 
buy. It is sheer folly to formulate market policies without 
rooting them in the results of adequate market research. 

Research on Selling Method. Market research should be 
used to suggest the selling machinery and methodology neces- 
sary to realize upon market possibilities. Research should be 
conducted on the all-important task of planning marketing 
campaigns, the task of building the sales organization, and the 
methodology in direct relation to particular market require- 

The market research unit should devote considerable time 
and effort to economy investigations, to the study of individual 
items of marketing methodology. Sales operations should be 
broken down into their basic elements by a species of time 
study. Averages of sales results should be worked out. Ideal 


standards of sales operations should be established, and ac- 
complishments should be checked against these standards. The 
sales research unit should compile and evaluate information 
on personal selling activities, number of sales calls, prospecting, 
missionary work, etc. In the same way techniques of copy 
illustration, typography, size of unit space, etc., in advertising, 
and similar problems in other media, such as radio and tele- 
vision, should be tested periodically by persistent and relentless 

Compiling Market Factors. The market-research unit can 
profitably devote time to the collection, compilation, and 
analysis of such factors as per capita consumption by terri- 
tories, automobile registrations, income-tax returns, and other 
statistical data that may be used in connection with market 
forecasting. After the market forecasting unit has decided 
upon necessary market indices and their combination, the type 
of information desired can be standardized. 

The market research unit should concentrate investigations 
on selling efficiency and the cost to sell. 

Research on Marketing Costs. One of the most important 
current tasks of marketing management is effective control 
and possible reduction of marketing costs. Exorbitant market- 
ing costs are often the result of wasteful routine methods or 
of vaguely defined campaign objectives, "hunch" planning, 
and illogical market policies. 

The scientific approach to the study of the effectiveness 
and cost of a particular marketing method involves analysis, 
classification, synthesis, and measurement. 

Management research concentrated on solving the acute 
problems of distribution may develop new types of marketing, 
new merchandising techniques, and new selling policies to 
gain a larger share of the consumer dollar. 

The Bureau of Foreign and Domestic Commerce points out 
in certain of its bulletins 1 that the only sound, sensible way 
to determine the possible market for a product is determinative 
research. The following check-list 1 with reference to con- 

1 Adopted from "Economic Series Nos. 41 and 53," op. cit., passim. 



sumers is offered to aid the researcher in selecting the impor- 
tant marketing factors upon which to concentrate his research. 

Data Required on the Users of the Product: 

1. What types of consumers will use the product? (Are they 
housewives, school children, farmers, salesmen, animals, 
or what?) 

2. How many potential customers are there? 

3. What factors reduce the size of the total market? 

a. How many live in sections of the country where 
they will not use the product? 

b. How many are in the wrong age group to use the 

c. How many are likely to be poor prospects because the 
product is too expensive or too cheap? (To what 
income class will the product appeal?) 

d. How many are likely to be out of the market because 
they already have similar products giving satisfactory 

e. How many live in such a manner that they cannot 
use the product? (If, for example, one lives in an 
apartment, one is not a good prospect for a lawn 

f. How many would not be prospects because of re- 
ligious or racial reasons? 

g. Are there any other market limiting factors peculiar 
to the product? 

4. How many prospects are left for the product? 

Location of Customers: 

1. Where do the potential customers live? 

a. Are they scattered throughout the country? 

b. Are they limited to particular sections or states? 

c. What size of community do they live in, and what 
are their buying habits? 

i. Cities, and buy at: 
neighborhood stores? 
downtown stores? 



ii. Small towns? 

iii. Farms, and buy: 
in town? 

by mail? 

d. Are there climatic or employment factors in their 
location that one should investigate? (Is the product, 
for example, designed only for cold climates or for 
workers in steel mills?) 

Relation of Price to Customer Demand: 

1. Will the price of the product meet the requirements of 
logical prospects? 

2. Will the price of the product compare favorably with 
that of existing products of the same kind and of similar 
products which may be introduced shortly? 

Determining Volume of Sales: 

1. What is the present consumption volume of products of 
this type? 

2. Is the market for this product likely to change in size 
during the next two, five, or ten years? 

a. Expand? 

b. Contract? 

c. No change? 

3. How often will consumers buy this product? (Is it a 
durable goods item which will last several years, or is it 
an item in daily use which needs replacing every few days 
or weeks? ) 

4. Will the product sell evenly throughout the year? 

5. Will the bulk of the sales be concentrated in one or more 
areas, as with truck tire chains? 

Research in Buying Habits of the Users: 

1. If a seasonal product: 

a. When will immediate customers buy? 

b. If customers are not first users, when will the users 



2. Is there any way to level out seasonal fluctuations in sales 
by balancing sales to different groups of purchases? (For 
example, seasonal sales of agricultural machinery in one 
part of the country might be at least partly leveled out 
by sales in another part of the country, or by export 

3. Are purchasers of this type of product accustomed to 
buying it ahead of need, or do they tend to place spot 
orders for instant shipment? 

4. Are the potential users of the product accustomed to 
rely on trade names or company names, or do they buy 
mainly on the basis of technical specifications? 

a. If they buy mainly under trade names or company 
names, do you have established names that you can 
sell under? 

b. If they buy mainly under technical specifications, 
will the product meet such specifications, and has 
your staff adequate knowledge of and experience in 
doing business on these terms? 

5. How do major users or distributors of the product 
negotiate for it? 

a. Do they buy it from distributors or producers in the 
open market at established prices? 

b. Do they place special orders with manufacturers 
for large-lot production? 

c. Do they do both, depending upon circumstances? 
(Note.— If the principal users or distributors nego- 
tiate directly with small or other manufacturers for 
big lots at special prices, they may create opportuni- 
ties and also problems for you. Such orders some- 
times entail loss of independence on the part of the 
producer. For example, if one big distributor takes 
most of a producer's output, he may be unable to sell 
effectively to others. And upon renewal of his con- 
tract, the single distributor may force prices down 
until the producer's profit disappears. Meanwhile 
the producer may have lost touch with old distribu- 
tors. He should, therefore, think twice before agree- 
ing to sell the bulk of his output to one or two 
distributors or users.) 


6. What features of the product appeal most to consumers? 
2l. Cost of operation? 

b. Durability? 

c. Ease of repair? 

d. Price? 

e. Service and maintenance? 

f. Style? 

g. Trade-in value? 

h. Other? 

7. What are consumer prejudices, if any, in regard to: 

a. Cost of operation? 

b. Durability? 

c. Ease of repair? 

d. Price? 

e. Service and maintenance? 

f. Style? ' 

g. Trade-in value? 

h. Other? 

8. Are products of this kind usually bought by consumers: 

a. For cash? 

b. On open account credit? 

c. On time payment plan? 

d. On an installed basis? 

e. With the expectation of a service guarantee? 

9. // bought on an installed basis, will: 

a. Cost of installation be included in the price of the 

b. Installation of the product require additional expense 
for the consumer as, for example, re-wiring for an 
electric range? 

10. Has the product any possibilities for industrial use? 

Management should insist on thorough research to find the 
best and most suitable methods for distributing the product, 
and for maintaining good relations with distributors and cus- 
tomers. It is usually smarter, more effective, and quicker to fit 
the distribution of the product into well-established trade 
channels and distribution procedures than to attempt to set 
up one's own sales organization. 



Research on Channels of Distribution. 

1. How, if at all, does the location of the prospects affect 
your plans for distribution channels? (If prospects are 
loosely scattered over the entire country, it might be 
advantageous to distribute the product more through 
your own manufacturer's salesmen and less through 
industrial suppliers located in population centers.) 

2. Through what channel or channels are consumers ac- 
customed to buying products of this kind: 

a. Directly from manufacturer's headquarters? 

b. From manufacturer-owned outlets? (Some manufac- 
turer-owned outlets also handle goods produced by 

c. From manufacturer's agents? 

d. From jobbers, wholesalers, mill supply houses? 

e. From other industrial distributors? 

f. From retailers (including chain stores)? 

g. From independent service outlets (radio, plumber, 
or auto repair shops)? 

h. From house-to-house salesmen or demonstrators or 
direct from ads, books, clubs, or co-operatives? 

3. What outlet does a majority of customers prefer? 

4. // the method by which you expect to get the product 
into consumers' hands is not the same as the general 
preference, what is the reason for the difference? 

a. Difficulty in securing dealers? 

b. Does not follow pattern used for other products in 
the line? 

c. Requires too much time to secure market coverage? 

d. Competition too great? 

e. Any other? 

5. Are the reasons indicated in Question 4 important 
enough to justify your decision to market your product 
in a way that does not conform with the way consumers 
prefer to buy products of this kind? 

6. Have you considered the possibility that it might pay 
you, for a preliminary trial period, to confine distribu- 
tion of your product to one or a few selected regions of 
the country? 


7. What channel or channels do you actually plan to use? 

8. Assuming that you will distribute your product through 
retailers, what kind of retail stores will sell it? (e.g., 
grocers, department stores, hardware stores, gift shops, 
or what?) 

9. Are you familiar with the operations of the particular 
types of wholesalers, jobbers, or retailers who can log- 
ically handle your product? 

a. How many such establishments are there? 

b. Where are they located? 

c. What percentage of total sales volume in this field is 
done by: 

i. Independent stores? 

ii. Corporate chains? 

iii. Voluntary chains? 

iv. Manufacturer-owned stores? 

v. Consumer co-operatives? 

vi. Others? 

d. On what basis do your competitors usually sell prod- 
ucts of this kind to retailers? 

i. Do they grant an exclusive nation-wide franchise? 

ii. Do they grant exclusive franchises for different 
regions of the country? 

iii. Do they distribute through several selected sup- 
pliers in each area or trade center? 

iv. Do they distribute generally through any or all 
suppliers, or any or all of certain types of sup- 
pliers, in each area who are willing to handle the 

e. If on an exclusive basis, do dealers expect to be pro- 
tected against competition from other retail outlets 
in their town or neighborhood? 

f. Can you sell your product through both independent 
and chain stores? 

g. At what seasons of the year will retailers be most 
likely to buy the product? 

10. What is the best and most efficient method of selling to 

2l. Through established wholesalers or jobbers? 



b. Through exclusive distributors? 

c. Through one's own factory-controlled sales force? 

d. Through a combination of the above? 

e. Through other channels? 

1 1 . What is the best and most efficient method of selling to 

a. Through salesmen, demonstrators, or technical per- 
sonnel working out of the factory? 

b. Through branch offices of the factory? 

c. Through brokers, sales agents, or others? 

d. Do you know the wholesale trade practices, dis- 
counts, allowances, billings, credit, and warehousing 
which you will have to meet? 

12. // products like yours are usually installed or have a 
service guarantee, will you and your distributors con- 

13. // so, have you arranged for service, installation, and 
repair parts through the distribution channels? 

Transportation Considerations: 

1. Have you considered the best and most efficient way of 
transporting the product to your customers? 

2. Have you studied alternative carriers— water, truck, rail, 
and air— from the point of view of: 

a. Rates? 

b. Territory served? 

c. Accessibility to your plant? 

d. Losses in transit? 

e. Packaging requirements? 

f. Speed in handling? 

g. Reliability? 

h. Other factors? 

3. Have you decided exactly how your product should be 
prepared for shipment? 

After-Sales Service. 

1. Where will stocks of your product be maintained? 

2. Where will service men and spare parts be available? 

3. Will you require warehouses? 


Market Competition. A management research unit must 
meet the challenge of market competition on the product. Re- 
search must be conducted on a wide scale in order to determine 
the size and extent of competition and the intelligence with 
which it is being directed. Seldom are products so revolu- 
tionary, so extremely important, or so great an improvement 
over all similar products that they will meet no competition. 
Perhaps a typical example of a product that at the outset had 
little or no competition is nylon yarn; yet in a relatively short 
period, competition developed. Research, then, must develop 
usable selling techniques to gain a profitable share of the 
market. A knowledge of the answers to the following United 
States Department of Commerce questions may be of vital aid 
to the market researcher: 

Research on Competition. 

1. What companies make products that compete with your 

2. What advantages have competitors over your product? 

3. What is the reputation of: 

a. Leading competitive firm? 

b. Leading competitive products? 

4. Do you know of competitors, or potential competitors, 
who are likely to enter the field with products similar to 

a. If so, what is the reputation of each? 

b. Do they have enough technical or marketing skill so 
that they may develop a better product, or market 
it better? 

5. Can any one quickly place a seriously competitive prod- 
uct on the market? 

a. Have you basic patents that would reduce the likeli- 
hood of sudden and unexpected competition? 

b. Are there engineering or other factors that would 
reduce the possibility of unexpected competitors? 

6. To what extent do "unrelated" products indirectly 
compete with your product? (Domestic washing ma- 



chines, for example, indirectly compete with commercial 
laundry equipment.) 

7. Do past, present, and prospective technological develop- 
ments give any indication of whether this indirect com- 
petition will increase in the future? 

8. Are changes in materials or methods likely to reduce 
need for your product? (For example, increased use of 
plastics might, by reducing the need for machining metal 
parts, decrease the sales of a milling machine manu- 

9. Are changes in materials or methods likely to increase 
your present competitors' sales at the expense of others? 
(Increased use of light metals might favor a competitive 
maker of milling cutters who had designed a line espe- 
cially for cutting light metals.) 

10. Have you discussed with your research or engineering 
staff all important past, current, and prospective tech- 
nological trends that may affect your competitive situa- 
tion? If you have no research or engineering unit, have 
you located some unbiased and foresighted outside re- 
search advice and made the fullest use of it? 

11. Are your name and reputation already established in the 
minds of the people who will distribute your new prod- 
uct, and the people who will use it, with respect to: 

a. Similar products you may already make? 

b. A general reputation for quality and engineering 

c. A general reputation for dependability, stability, 
honesty, and fair dealings? 

12. In the light of your own standing, or lack of standing, 
in the market for your product, is it best to trade on 
your company name in introducing the product, or 
would it be better and more satisfactory to build up a 
separate name for the product itself? 

13. Can your product compete favorably with similar 
market products on: 

a. Price? 

b. Quality? 

c. Performance? 


d. Finish and appearance? 

e. Durability and length of service? 

f. Service guarantees? 

g. Other guarantees? 

h. Package and methods of packing? 

i. All other respects? 

14. Has your product had controlled engineering perform- 
ance tests side by side with competitive products? (Such 
tests, especially when performed by an independent 
outside laboratory, often provide excellent bases for 
advertising and promotional work and for building 

15. What operating advantages can you claim for your 
product over those of your competitors? (Does it turn 
out work faster, or is it a multi-purpose piece of equip- 
ment that can be used for different operations, or does 
it require less skill to operate, or what? ) 

16. What other advantages, if any, can you claim for your 
product as against those of your competitors? (Is its first 
cost less, does it require less floor space, does it require 
less maintenance? ) 

17. Are competitor products purchased mainly on the basis 
of: . 

a. Technical specifications? 

b. Reputation of the company? 

c. Reputation of the brand or trade name? 

d. Other factors? (e.g., reciprocal sales agreements, 
company affiliations, personal friendships, etc.) 

18. If you cannot match certain special services provided by 
your competitors, can you provide equal value by quot- 
ing lower prices, or otherwise? If so, will customers be 

19. Will the internal situation (reciprocal buying, agree- 
ments, etc.) in the industry limit the number of prospec- 
tive customers? 

Experience has demonstrated that a satisfactory price policy 
must be founded on the results of research, and included in 
price research should be the answers to the following questions: 



Determining Price Policy. 

1. What is your price policy on the product? 

2. Have you figured your profit margin as accurately as 

3. Have you clearly decided whether you want to follow 
a big-volume, small-margin price policy? 

4. If, in your price policy, you are shooting at a relatively 
limited group of prospects, should you further reduce 
the estimated total potential prospects? 

5. Are you sure your price schedule on the new products 
will meet the requirements of all your logical prospects? 

6. Have you considered insurance costs, as well as costs of 
manufacture and selling, in determining your price? 

7. Have you considered all transportation costs, including 
basic rates, yard and switching charges, if any, and other 
handling costs? 

8. Have you considered packaging and packing costs? 

9. How will installation costs, if any, affect your price 
policies and that of your distributors? 

10. Will you service, or help to service, the product? If so, 
will the user pay you directly for the service? 

11. Will you expect your distributors to help service the 

12. How will performance guarantees, if any, affect your 
costs and prices and those of your distributors? 

13. Will you sell spare parts at cost or at a profit? 

14. Have you worked out a complete factory-price schedule 
for spare parts? 

15. If your distributors will also handle spare parts for your 
product, have you worked out spare-parts price sched- 
ules for sales to them, and suggested prices for resale to 

16. Have you decided what classes of customers will be 
entitled to trade discounts and allowances? 

17. Have you determined the schedule of trade discounts 
and allowances to: 

a. Exclusive distributors? 

b. Wholesalers? 

c. Retailers? 


d. Users to whom you sell direct? (e.g., governmental 

1 8. How do you figure your discounts and allowances? 

19. Will you offer cash discounts to your customers? 

20. After considering trade customs in the field for your 
product, have you determined the policy with respect 

a. Pricing point? (e.g., f.o.b. factory, local warehouse, 

b. Credit? 

c. Credit facilities? 

d. Collections? 

e. Returned goods? 

f. Consignments? 

g. Order cancellation? 

h. Damaged or unsatisfactory goods? 

i. Use of minimum retail prices through price main- 
tenance agreements? 

j. Insurance? 

There are also questions on sales and advertising which 
require thoughtful research: 

Sales and Advertising. 

1. Have you made an estimate, in terms of direct selling 
costs, of what it ought to cost you per unit to promote 
and sell your product? 

2. If you have other products, can your existing sales force 
handle a new item without harming the sale of the 

3. Do you now have a sales department selling other 
products? Will changes or additions be necessary? 

a. Will it be necessary to: 

i. Increase the sales force? 

ii. Decrease the size of territories? 

iii. Do both? 

b. Will it be necessary to provide for additional super- 
vision or control in the sales department? 



c. Will it be necessary, or advisable, to change existing 
methods of compensating sales personnel? 

d. Will the sales personnel require special training to 
sell the new product? 

e. If the product is a seasonal seller, will its sales peak 
coincide with that of your other products and thus 
add to your problems, or will it come at a different 
time and thus fill in the valleys? 

4. If a separate sales force is required: 

a. Will a type of salesman which differs from your 
present type be needed? 

b. Will the men require special or technical training? 

c. Will the entire sales force work out of the home 

d. Do you know how many salesmen will be needed? 

i. Have you determined their compensation? 

ii. Have you worked out territory assignment and 
routing through the field? 

e. Have you given special thought to the "missionary" 
selling they may have to do for introductory 

5. Will your salesmen "sell" the new product in the sense 
of actually closing sales, or will they "negotiate" sales 
which the management will close? 

6. How seriously would sales of the new product be 
affected by a business recession? 

a. If the new product is the only one you make, would 
it be more, or less, susceptible to a business recession 
than most industrial products? 

b. If you also make or handle other products, would 
sales on them be more likely, or less likely, to be hit 
by a business slump than sales on the new product? 

7. Have you formulated policies for promoting your 
product among: 

a. Users? 

b. Distributors? 

8. Do you know in detail the sales promotion and advertis- 
ing methods used by the competitors you will face in the 


9. Do you know the sales promotion practices followed by 
distributors in reselling your type of product? 

10. Do you intend to launch immediately into advertising 
and sales promotion activities to boost your product, or 
would it be better to begin later? 

1 1. Are most of your prospects already accustomed to using 
products of this type, or will they have to be taught to 
use them? 

12. If they have to be taught, do you have a plan for teach- 
ing them? 

13. Have you an existing advertising and sales promotion 
setup which can handle the new product without harm- 
ing its efforts on behalf of existing products? 

a. If so, how much additional personnel will be needed? 

b. If not, are you planning to set up separate advertising 
and sales promotion sections or departments for the 
new product? 

14. Have you an existing advertising agency connection 
which will be able to handle the new product? 

15. Have you decided on the details of the advertising 

a. What advertising and promotional support, if any, 
will be given locally to: 

i. Distributors? 

ii. Wholesalers? 

iii. Retailers? 

b. Who will bear the costs of this local advertising and 
promotional support, and in what proportion? 

c. How will you control such assistance so as to make 
certain that it is used most efficiently for the benefit 
of the product? 

d. What approach will you use in advertising your 

e. What engineering and design features of your prod- 
uct can you specially stress in your advertising and 
promotional work? 

f. What message, in general, will be the basis of your 
advertising appeal? 

g. What message will form the basis of your opening 
promotional effort? 



1 6. Have you determined how much and what type sales 
promotion assistance your own salesmen will need to 
help them sell to distributors or users, or both? (E.g., 
what engineering advice, market data, printed catalogs, 
drawings, samples, briefcase portfolios, educational slides 
or films, or scale models could they use? ) 

17. What general advertising and promotional support (for 
example, catalogs, hand-out circulars, dealer display 
materials) will you give your distributors? (Adapt such 
support carefully to the nature of your product. For 
example, some small specialty items handled by indus- 
trial distributors can be mounted on counter cards for 
most effective dealer sales promotion.) 

18. Have you planned sales and service manuals, parts lists, 
tables of shipping weights and measures, and the like for 
the use of distributors and users of your product? 

19. What advertising media will you use? 

a. Business papers? 

b. Daily newspapers? 

c. Direct mail? 

d. Telephone directories? 

e. Consolidated industrial catalogs? 

f. Manufacturers' registers? 

g. Other media? 

20. Do you know whether your competitors are carrying 
on any newspaper or other organized publicity efforts 
(as distinguished from advertising) to make their prod- 
ucts more familiar and acceptable to distributors and 

21. Do you plan to use such publicity? 

22. Will your promotion and advertising budget be deter- 
mined on the basis of: 

a. The cost of attaining a definite objective? 

b. A certain percentage of estimated sales? 

c. An arbitrary sum? 

d. Some other system? 

23. Are the advertising and sales-promotion programs 
closely co-ordinated with the direct selling? 

24. Are the salesmen giving proper emphasis to prospecting? 

25. Is there a procedure for keeping mailing lists up to date? 


Sales Program and Sales Personnel: 

1. Do the executives and their advisers regularly sit down 
together to take stock of overall sales programs and to 
plan where you are headed? 

2. Is there a sales plan which includes quotas for individual 
salesmen, and are these quotas adequate? 

3. Is the selling expense controlled through a budget? 

4. Are the best sources being contacted for recruiting the 
sales force? 

5. Is the selection of sales personnel based on a combination 
of interviews, application forms, and aptitude tests? 

6. Has the salesmen's compensation plan been tailored to 
meet the special requirements of your situation? 

a. Does it provide an incentive for the salesman to put 
forth his best effort? 

b. Does it provide relatively stable earnings? 

c. Does it encourage a well-rounded selling job, with 
emphasis on the phases of greatest advantage to the 

d. Is there a uniform traveling expense control policy? 

7. Is there a comprehensive sales-training program which 
includes the elements of explanation, demonstration, field 
practice, and follow-up? 

a. Is there a provision for discussion groups based on 
practical field problems? 

b. Is the sales manual an integral part of the training 
program, and is it modernized as to content and 
method of treatment? 

C. Is provision made for a retraining or "refresher" pro- 
gram which re-emphasizes fundamentals and features 
new developments or changing conditions? 

d. Does the training program extend down to the dis- 
tribution organization? 

8. Do the salesmen understand that courtesy and service to 
customers are expected at all times? 

9. Are the sales operations effectively supervised? 

a. Is a fair share of your territorial potential secured, 
especially in the more profitable product lines? 



b. Is it possible to detect weak points in the field or- 
ganization and take prompt corrective action? 

c. Is the salesmen's time controlled through some form 
of plan or work budget which insures maximum time 
on direct selling activities? 

d. Are salesmen's reports designed to produce the sig- 
nificant data required for intelligent sales direction 
with a minimum of clerical effort? 

Obtaining Customer Good-Will. 

1. Are customer complaints or dissatisfactions brought to 
the attention of responsible sales executives? 

a. Are they so handled that the complainant will be 
mollified and the company's operations improved? 

2. Is authority for publicity and for public announcements 
so assigned and restricted as to promote good public rela- 
tions for the company? 

3. Is the public welcomed, or encouraged, to visit your 
establishment as a means of creating an interest in and an 
appreciation of the company's place in the economic life 
of the community? 

a. Has an "open house" been held, with planned tours of 
your facilities, for either the general public or em- 
ployees' families? 

4. Does the company participate in worthy community 
activities and give consideration to requests of local 
groups for charitable contributions? 

5. Is an effort made to be a "good neighbor" in the com- 
munity by eliminating or controlling conditions that 
might constitute a public nuisance, or to which neighbor- 
ing residents might object? 

6. Are the local press relations such as to promote favorable 
publicity for your company? 

Usually the manufacturer of consumers' goods will find it 
exceedingly profitable to conduct constant, deliberate market 
research whenever he assumes a large portion of the selling 
burden. Sometimes he attempts to pass his entire marketing 
problem over to the middleman who reaches the consumer, but 


as a general rule this is unsatisfactory in profit results. Ac- 
cordingly the medium or large manufacturer attempts to 
establish his own selling organization. 

To solve the problem of distribution, management is re- 
quired to perform relentless research in market and marketing 
methodology and to establish a well-organized sales depart- 
ment with functions logically assigned to an intelligent, well- 
trained selling staff. 

Traffic Research. One of the factors, sometimes overlooked 
by management, is the traffic division which, in many cases, 
supplies the transportation for incoming materials and out- 
going products. Research in traffic activities may be promoted 
as a result of correct answers to such questions as: 

1. Among the organization personnel, is there a specialist 
on traffic and transportation matters with a knowledge of 
shipping rates, classifications, common carriers, etc.? 

2. Have the responsible persons fully investigated alternative 
transportation services to those now in use for possible 
economies or advantages? 

3. Has a careful investigation been conducted on the merits 
of operating your own trucks as compared with contract- 
ing for such service? 

4. Is it profitable to contract for servicing and maintaining 
automotive equipment? 

5. Does the traffic unit take care of executive travel 

The eleventh responsibility of management proclaims that 
goods must be manufactured and sold at a profit. Profit or loss 
is the differential between cost and price. Price is the phe- 
nomenon resulting from fluctuations in supply and demand 
in a free market. 


Writing the Research 

The Report. The first requirement of writing a report is 
accuracy. The best reports are a combination of accuracy, 
correct English, and lucid writing. The writer must be com- 
pletely objective in the presentation of his factual material. He 
must marshal his facts so that they will win his reader's at- 
tention, gain his confidence, and hold his interest. The enthu- 
siasm and conviction of the writer are factors in preparing 
compelling reports. 

Many otherwise excellent reports fail to obtain the reader's 
attention because of poor organization and outline material. 
The readability of a manuscript is destroyed when irrelevant 
material distracts the reader. 

The writer must discriminate between essential and non- 
essential information. He must not yield to the temptation to 
overwrite his subject because of the quantity and quality of 
data he has collected during his research. All the collected 
material may be interesting to the writer, but only a portion 
of it pertinent to the report. 

Simplicity should be the aim in preparing the manuscript; 
short sentences, explicit vocabulary of words, and correct 

Irony and cynicism are misplaced in reports. The use of 
unfamiliar, general, and vague terms, slang, and hackneyed 
phrases are also to be avoided. 




The Outline. Research, isolated and confined to laboratory 
or plant, would be of little value to anyone. Its results, to be 
effective, must be transmitted to those who can put them into 
profitable action. Thus, the reporting of research findings 
becomes a major undertaking, worthy of thoughtful study. 
The observance of certain simple, basic rules will be of im- 
measurable assistance in preparing a report. 

The author's own mental pattern of just what he wishes to 
convey has much to do with successful reporting. Before a 
word is written, the writer would do well to have a private 
conference with his own mind, sorting out the objective, the 
steps of his project, and the net results of his research. He 
must envision the ultimate reader or readers and think of the 
form and terms which will make the report most usable by 
those for whom it is intended. 

With his mind clear in purpose, his next, and very impor- 
tant, step is making an outline 1 and remaking it, if necessary, 
until it forms a logical step-by-step framework for his purpose. 
Once this structure is correctly built, the content of his re- 
search findings is readily put into place. 

Outlining the Report. Outlining involves organizing the 
constituent parts of the proposed report into smooth con- 
tinuity, dividing topics and subtopics according to their rela- 
tive significance, and planning such mechanical devices as 
headings, subheadings, and marginal titles to aid the reader in 
understanding the content. An outline gives the writer a 
visual aid to hold his perspective as he places the factors of 
his subject to best advantage. One of the chief benefits of a 
good outline is its tendency to point out omissions in content. 

The initial outline sometimes merely serves to point the way 
to a better approach in reporting which was not visualized 

at first. . 

If the report is being prepared for the use of a business ex- 
ecutive, it should be remembered that his responsibilities 
include planning. Planned activity and accomplishment are 
measured by recorded experience. 

1 See Sample Outline, Appendix C. 



An executive requires a wealth of complete, accurate, and 
current information in order to control an enterprise effi- 
ciently. Reports are his mainstay. 

Writing the Report. 1 Translating technical information 
into simple terms is an art. The writer must bear in mind that 
the reader may not be familiar with the field covered by the 
report. Thoughtless repetition of terms adds weakness to a 
report. A thesaurus is a great aid in providing a vocabulary. 

Clear illustrations, such as graphs, charts, tables, diagrams 
and pictures, serve to make a manuscript more readable by 
permitting elimination of involved descriptions of data. The 
writer is cautioned to make these aids simple and easy to 

Illustrations 2 should be accurately titled and should be 
numbered for easy reference. 

Center headings and side headings, logically arranged, are 
additional aids to simplicity and ease of reading. 

The matter of modesty is something to be kept in mind by 
a person who is preparing a business report. In general, a report 
should be written in the third person, as it is considered better 
form for a researcher not to refer to himself as though he 
were the sole authority on the subject of his manuscript. 

Such expressions as "the writer believes," or, "in the opinion 
of the writer" may be used; however, if the writer must refer 
to himself, he should use the pronoun "I" and not "we." He 
should avoid the use of the imperative— for example, "you 
must" or "you should"— in addressing the reader. Such ex- 
pressions as, "it can be seen clearly," "I have shown," "it is 
obvious," "it is evident," "it has been proven beyond doubt," 
or "the majority of executives believe" should only be used 
when they are incontrovertible. 

The Use of Numerals. When using numerals up to one 
hundred, or when they are round numbers, it is customary to 
write them in words. When figures are quoted from numerical 
tables, it is standard practice to use numerals. 

1 Excellent examples are shown in Appendix C. 

2 See page 166. 



Use of Quotations. No writer should use material from 
another author without giving full credit to the source. Quota- 
tions can and should be used, since they serve to confirm the 
researcher's findings; they should be used sparingly. 

When necessary to use a quotation, it is conventional to 
single-space it and indent within a paragraph. A numeral 
placed at the conclusion of the quotation and slightly above 
the punctuation mark refers the reader to foot-note giving 
credit to the source. No quotation marks are necessary when 
the quotation is indented. If the quotation does not exceed 
one line, it should be included in the sentence with double 
quotation marks and an appropriate foot-note. If a partial 
quotation is used, the part omitted should be indicated by 
(ellipsis) three periods (•••)• 

Quotations should be the exact words of the author as taken 
from the original source. However, it is permissible in some 
cases to paraphrase the quotation to avoid using long excerpts. 
This will give uniformity of style to the manuscript. If the 
writer does paraphrase, he must give appropriate credit to the 
author by using a foot-note with the term "adopted from" 
included in the foot-note. If the manuscript is to be published, 
it must be remembered that the writer must first obtain per- 
mission for its use from the publishers. 

Dash. In the preparation of reports, the dash is used to 
signify a sudden break or abrupt change in thought, to denote 
an interruption or an unfinished word or sentence; it is used 
instead of commas or parentheses, where the meaning may be 
clarified by its use; before a final clause that summarizes a 
series of ideas; and after a word or phrase set in a separate 
line, provided that the factors or elements are implied in the 
word or phrase. The dash may also be used with a preceding 
question mark, in lieu of a colon. The dash may not be used 
at the beginning of a line of type or immediately after a 
comma, colon, or semicolon. 

Foot-Notes. Foot-notes are used for giving credit to another 
author for the use of his material, for establishing validity of 
data or statements, for including explanation of text data which 



would be extraneous if included in the context, and for pro- 
viding cross-reference to other parts of the report or ap- 

Sources of data should be cited in the foot-note, using exact 
information from the title page as authoritative and not from 
the cover of the book. The four parts of a foot-note are ( i ) 
author's or editor's name, (2) full title of work cited, (3) facts 
of publication, and (4) volume and page references. 1 

References cited may be books, periodicals, legal cases, 
statutes, personal communications, or any suitable valid data. 

A typewritten foot-note is placed two spaces below the 
text material at the bottom of the page. It is separated from 
the text by a line about one and one-half inches long above 
the foot-note at the left-hand margin of the text. 

In writing a business report, it is customary to number the 
foot-notes consecutively for each page- and not in continuity 
from page to page. 

Tables, graphs, and charts are foot-noted differently from 
quotations. Symbols instead of numerals are used. The aster- 
isk ( # ), dagger (t), double dagger (J), section marks (§), or 
other symbols are preferable in these instances. 

A foot-note referring to a numerical table, graph, or chart 
is placed immediately beneath the presentation and not at the 
bottom of the page. 

In citing for the first time in the manuscript from a book 
which is not a compilation of articles, the standard foot-note 
is given below. 2 Where sources consist of two or more volumes 
and the citation is taken from two or more pages, the standard 
form of foot-note includes additional information. 3 

1 It is considered good foot-note technique to use both the abbreviations 
Vol. and p. in business reports and documents. Full citations prevent con- 

2 William Henry Leffingwell and Edwin Marshall Robinson, Textbook of 
Office Management (McGraw-Hill Book Company, Inc., New York, 1943), 
P. 357- 

3 Katherine M. H. Blackford and Arthur Newcomb, The Right Job, How 
to Choose, Prepare for, and Succeed in It (The Review of Reviews Cor- 
poration, New York, 1924), Vol. II, pp. 485-495. 



When citations are taken from volumes divided into books, 
such as The French Revolution, by Thomas Carlyle, which is 
in two volumes, the foot-note includes distinctive detail. 1 

The form of presentation of articles taken from periodicals 
cited in a report is somewhat different in form from that of a 
book. 2 A foot-note citing information from a government 
publication is quite similar to that of a periodical. 3 

When a report is being prepared for publication, under- 
scoring is used to indicate to the printer portions to be itali- 

Legal Citations. A writer citing data from legal books, 
reports, or cases should be thoroughly familiar with and 
properly use the standard abbreviations so extensively used in 
documenting legal literature. The style of foot-notes and 
head-notes in legal writings differs somewhat from that found 
in general business books. It seems that titles of law books and 
reports are not italicized in foot-note or in the text of material. 

However, for the sake of creating uniformity of style in 
management reports, it is deemed desirable to use italics for 
titles and cases but not for the title of the report in which the 
case appears. 

It is usual procedure when foot-noting * a citation from a 
law book to use the author's surname only, preceded by the 
volume number (in Arabic) and followed by the title of the 
book, date and section number. It will be noted that the first 

1 Thomas Carlyle, The French Revolution, A History (A. L. Burt Com- 
pany, New York, 191 1), Vol. I, Bk. II, Chap. Ill, pp. 34-35- 

2 A. G. Christie, "Industrial Power Plant Problems," Industry and Power 
(August, 1946), Vol. II, pp. 57-58. „ 

3 John R. Bromell, "The Role of Management in Successful Wholesaling, 
Domestic Commerce, United States Department of Commerce (United 
States Government Printing Office, Washington, D. C, August, 1947), Vol. 
XXXV, No. 8, pp. 3-5- 

*4 Holdsworth, History of English Law (1937) § 94. 

4 2 Pollock and Maitland, History of English Law (1898), 2d ed., § § 21-25. 
4 1 Pomeroy, Equity Jurisprudence (191 8), 4th ed., § 913. 

4 Hicks, Materials and Methods of Legal Research (1942), 3d ed., pp. 

4 1 Wigmore, Code of Evidence (1935)' ec *-> & 22 49- I 3- 
4 1 Scott, The Law of Trusts (1939)* § § 124.4-126.2. 



numeral of the foot-note, raised slightly above the line of type, 
is the reference number and the second numeral on the line 
indicates the volume number. A foot-note for a citation from 
the Cyclopedia of Law and Procedure (Cyc) is shown. 1 

The term United States should not be abbreviated when 
used in the title of a case. 2 Where many legal cases are cited 
they should be arranged according to the importance of the 
Court, i. e., United States Supreme Court, (U.S.) 2 United 
States Circuit Courts of Appeals, (CCA.) 3 and Federal Dis- 
trict Courts (D.C.) 4 In citing states' decisions, the states should 
be listed in alphabetical order according to the rank of the 

The usual method for citing cases decided by the United 
States Supreme Court is: Indicate the volume number of the 
official report, United States Supreme Court (U.S.) and page 
number; identification of Supreme Court Reporter (S.Ct.); 
the book number of Lawyers' Edition, United States Supreme 
Court Reports (L. Ed.), page number and date of case. 2 If 
a decision refers to a lower federal court, the abbreviation for 
the name of the court is placed in parentheses. 5 

1 39 Cyc, 224. 

2 United States v. American Surety Company, 322 U.S. 96, 64 S. Ct. 886, 
88 L. Ed. 1 158 (1944). 

2 Switchmen's Union of North America v. National Mediation Board, 320 
U. S. 297, 64 S. Ct. 95, 88 L. Ed. 61 (1943). 

2 National Labor Relations Board v. Hearst Publications, Inc., 322 U. S. 
in, 64 S. Ct. 851, 88 L. Ed. 1 170 (1944). 

2 Cafeteria Employees Union v. Gus Angelos, 320 U. S. 293, 64 S. Ct. 126, 
88 L. Ed. 58 (1943). 

2 Columbia Gas and Electric Co. v. American Fuel and Power Co., 322 
U. S. 379, 64 S. Ct. 1068, 88 L. Ed. 1337 (1944). 

3 Dillingham v. United States, j6 F. (2d) 35 (C.C.A.. 1934). 

3 National Labor Relations Board v. Poultrymen's Service Corp., 138 F. 
(2nd) 204 (CCA. 3d 1943). 

Western Cartridge Co. v. National Labor Relations Board, 134 F. (2d) 
240 (CCA. 7th 1943). 

4 Partidge v. Ainley, 28 F. Supp. 472 (D.C 1940). 

*Bracey v. United States, 142 F. (2d) 85 (D.C. 1944). 

United States v. Standard Rice Co., 53 F. Supp. 717, 101 (Ct.Ci) 85 

5 Engineers Public Service Co. v. Securities and Exchange Commission, 
138 F. (2d) 936, 78 (App. D.C) 199 (1944). 



When citing a case decided by a state court, it is common 
practice to give the name of the state, court reporter, and 
data; 1 however, there are variations to this practice. 2 If the 
case' is recorded in the Federal Reporter, this information 
should also be given in the foot-note. 3 

Government Documents. To footnote a citation from a 
government document such as a "House Bill," indicates the 
identification of body or group, number of bill, number of the 
Congress, and number of session. 4 

Excerpts, or quotations taken from letters or communica- 
tions other than published sources, should be acknowledged 
in a foot-note by giving the exact name, title of individual, 
company or government for which he works, and the date of 
the communication. 

There is standard practice governing the repeated use of 
the same source within a manuscript. Where references to the 
same book or work follow each other on the same page, or 
closely, without an intervening citation, the Latin abbrevia- 
tion ibid, (ibidem, meaning "in the same place") is used to 
avoid repetition. The author's name and the title of his work, 
once mentioned, may be omitted by using ibid. 5 followed by 
the volume and page number. When reference is made to the 
identical page of the same source as in the reference lmmedi- 

i Linney v. Cleveland Trust Co., 30 (Ohio App.) 345, 165 N.E. 101 (1928). 
*Mustro v. Lehigh Valley Ry. Co., 192 Atl. (Pa.) 888 (1937); 

3 In re Rausch, 258 N.Y. 327* 179 N.E. 755, 80 A.L.R. 98 <i93*>- 
Shetland v. Shetland, 102 NJ. Eq. 294, 140 Atl. 279 (1928). Statutes: 
43 Stat., 938, 28 U.S.C., 347 (a) (1925)- 

50 Stat., 692, c 690, 15 U. S. C. A. 1-4, (i937>- 
Legal Periodicals: . w „ . . _ , T 

Davis, "Dean Pound and Administrative Law (1942) 42 Col. L. Kev. 

^Goodrich, "Mr. Tompkins Restates the Law" (194O 27 Am. Bar. Asso. 

^°Anson/'Assignment of Choses in Action" (1901) 17 L.Q.R., 90- 

4 H. R. 8245, 67th Cong. 1st Sess. 
S. 674, 77th Cong., 1 st Sess. 

79 Cong. Rec. (1935) 47 8 8. 
*lbid., Vol. XIII, p. 94- 



ately preceding, use idem 1 meaning "the same" or "reference 
last cited." 

Repeated Reference. A quotation skilfully placed by a 
writer provides the reader with an instrument by which he 
gains confidence in the writing as he reads the collaborating 
and supporting information cited in the quotation taken from 
the works of a recognized authority in the particular field. 

The practice of placing footnotes at the bottom of the page 
instead of immediately under the quotation serves to prevent 
interrupting the interested reader. 

A writer preparing a typewritten manuscript for publication 
is reminded that the footnote is placed immediately under the 
excerpt or quotation so as to aid the printer in judging the 
necessary space allowances required for text material and foot- 
note purposes. The writer is warned to identify, positively, the 
footnote information or he may find it included erroneously 
in the body of the printed text. 

When references to the same sources follow each other 
closely and are interrupted by a quotation from a different 
book or source, the author's surname is used, followed by the 
Latin abbreviation op cit. 2 (opere citato, meaning "in the 
work cited") and page number. However, if another author 
by that name appears in the manuscript it is better to use the 
full name to avoid confusion. 

When repeated reference is made to an unsigned article in 
a periodical, the foot-note should be handled in the following 
manner. The Latin abbreviation loc. cit. 3 (loco citato, meaning 
"in the place cited") is used, following the title of the article, 
and followed by the page number of the citation. 4 When an 
additional quotation from the same article is cited on the same 
page of the report with no reference intervening, use loc. cit. 1 

1 Idem. 

2 Christie, op. cit., p. 58. 

3 Scholars disagree about the use of loc. cit.; however, it is believed that 
the method described above is desirable in management reports. 

4 "Tying Supervision into Management," loc. cit., p. 91. 



and page number only. Where title of article is included in the 
body of the report, use loc. cit. 1 and page number only. 

A foot-note used to indicate that information has been 
taken from more than one section of a book, or other source, 
is shown by the Latin word passim 2 (meaning "here and 

There are abbreviations in common use to indicate compari- 
son between one part of the manuscript and another. 3 They 
are permissible when used by the research reporter to refer 
to subject matter within his own report. If the researcher 
desires to suggest comparison between other works and his, 
he should use the Latin abbreviation cf. (meaning "confer 
or compare") preceding the reference in the foot-note. 4 The 
letter "f." ("if." plural) or et seq., placed after the page num- 
ber in a foot-note, indicates and the following page or pages. 5 

Certain abbreviations are considered poor form in the body 
of the report or manuscript. For instance, titles should be 
written in full and not abbreviated: Colonel for "Col.", Pro- 
fessor for "Prof.", and Doctor for "Dr." In general this holds 
true for most forms of abbreviation. 

Mechanical Organization of a Report. A well-planned 
management report consists of parts logically arranged ac- 
cording to their interrelationship so that the research findings 
are clearly presented. 

Preserving* the Report. When a report or manuscript is 
completed, it represents skill, knowledge, patience, and hard 
work by a person, or perhaps many persons, and is worthy 
of careful preservation. One practical measure is a protective 

1 Loc. cit., p. 92. 

2 L. Urwick, The Elements of Administration (Harper & Brothers, Pub- 
lishers, New York and London, 1943), passim. 

3 Cf. ante ("Compare before") ; cf. post ("compare after") ; cf. supra 
("compare above"); cf. infra ("compare below"); pp. 21 et seq. ("page 21 
and the following pages"). 

4 Cf. Dexter S. Kimball, Principles of Industrial Organization (McGraw- 
Hill Book Company, Inc., New York, 1933), p. 342. 

5 Kenneth Carver, "T he X in Plastics," Monsanto Magazine, (Monsanto 
Chemical Co., St. Louis, Mo:, June, 1947), Vol. XXVI, No. 3, pp. 4 if. 



cover so that a report may stand up under the constant wear 
and tear of hard usage. A mislaid report is of little value; there- 
fore, careful consideration of its convenient filing means that 
it is easily available at all times. 

For the sake of standardization it is preferable to use the 
spring binder on which the title is recorded. However, many 
reports, such as those containing records of monthly sales or 
production, may be encased in stiff paper covers with an 
appropriate title and date on the cover. Colored paper is often 
used to signify the type of the report. 

Title Page. When the researcher uses a spring binder, a 
blank page should be inserted behind the cover, followed by 
the title page which contains the title of the research project. 

A title must be brief but clear and explicit and make a 
visual impression upon the executive for whom the report is 
prepared. It should attract his attention and interest and be 
accurately phrased to describe the content of the report. 

The information shown on the title page usually consists of: 

1. The title of the research report 

2. The authorization for the preparation of the report 

3. The full name of the writer and proper identification 

4. The date of the manuscript 

This material should be properly placed on the page, with 
ample space between each factor so that its appearance shows 
proper balance. 

The Preface. The preface page follows the title page and 
contains a brief statement of the object, scope, and character 
of the research work; suggested methods of using it, and a 
short statement of methods of presenting the research findings. 

The preface should include acknowledgments to those who 
have contributed to or aided the research. Such acknowledg- 
ments should be brief and dignified. 

Table of Contents. The table of contents follows the 
preface page and shows a list of the chapter numbers, followed 
by chapter title and the page number upon which the chapter 



begins. In addition to chapter titles, the table may give an 
analytical description of the chapter contents by showing 
the subtitles or section headings, which give the reader a 
preliminary synopsis of the manuscript. 

List of Illustrations. The list of illustrations follows the 
table of contents. In a management report it is customary to 
prepare separate lists for statistical tables, charts, diagrams, and 
maps, when any one type exceeds twelve illustrations. Such 
lists should show the figure number, title of illustration, and 
page number of each figure. 

The Text of the Report. The body of the manuscript may 
contain, when necessary, an introductory chapter in which 
is discussed the nature and purpose of the research; the known 
works completed in the particular field; the relation of this 
research to similar studies; and research methodology used in 
accomplishing the results. 

The findings of the research should be carefully described 
and explained in a suitable number of chapters, each repre- 
senting a main division or major title of the research subject. 

Each chapter should start on a new page and be designated 
by the term "CHAPTER" in capital letters, followed by the 
appropriate Roman numeral, below which the chapter title 
is placed. 

The final chapter should include a summary of the findings, 
the conclusions, and recommendations of the researcher. 

The Appendix. Data which are relevant and supplementary 
but do not pertain explicitly to the research should be placed 
in the appendix. The data may include such items as statistical 
tables from which charts have been constructed, forms, docu- 
ments, original data, legal citations, exhibits, and other material. 
Appendixes should be designated by capital letters and not 
numerals, such as "Appendix A," "Appendix B," and "Ap- 
pendix C." 

The Bibliography. A bibliography follows the appendices. 
It is classified according to the type of the material, such as 
books, periodicals, documents, and manuscripts, and contains 



a list of the references used by the researcher. A bibliography 
provides the reader with a number of the sources from which 
the writer obtained his information. This gives the reader an 
opportunity to judge the completeness, thoroughness, and ac- 
curacy of the manuscript and opens the way for him to in- 
vestigate any particular part of the report which he may want 
to examine. 

Items in the bibliography should be listed alphabetically ac- 
cording to name of author, except in the recording of legal 
cases. The surname of the author is followed by the "given 
name" or initials, the title of the reference, and the facts of 
publication and may be followed by the number of pages in 
the reference. In the bibliography, the surname of the refer- 
ence is listed first, while in a foot-note the Christian name or 
"given name" is recorded first. 

The Bibliography. A bibliography may be annotated to' 
make it more useful to the reader. However, the nature of the 
report is the deciding factor. The annotation usually consists 
of a brief statement of the content of the reference along with 
a few words concerning its merit. 

The recommended form of bibliography for a management 
report is as follows: 


Almack, John G. Research and Thesis Writing (Houghton Mif- 
flin Company, Boston, 1930). 

Committee on Research of the Amos Tuck School of Administra- 
tion and Finance, Dartmouth College. Manual of Research and 
Reports (McGraw-Hill Book Company, Inc., New York, 

Dougherty, Carroll R. Labor Problems in American Industry, 
Fifth Edition (Houghton Mifflin Company, Boston, 1941). 

Sheldon, Oliver. The Philosophy of Management (Sir Isaac Pit- 
man and Sons, Ltd., London, 1924). 

Spahr, Walter E. and Swenson, Rinehart J. Methods and Status 
of Scientific Research (Harper & Brothers, Publishers, New 
York, 1930). 




Christie, A. G. "Industrial Power Plant Problems," Industry and 

Power, Vol. LIX, No. 2, pp. 57-58 (August, 1946). 
Hoffman, John G. "How Safe Is the Chemical Industry?" 

Monsanto Magazine, Vol. XXVI, No. 3, pp. 4-9 (July, 1946). 
"More Products by Cheaper Air Freight," Modern Industry, 

Vol. XII, No. 2, pp. 83-90 (August, 1946). 
Rigson, Paul. "Mechanized Handling for L. C. L. Freight," 

Material Movement, Vol. I, No. 6, pp. 12-14 (December, 

I 945)- 

"Tying Supervision into Management," Modern Industry, Vol. 

XII, No. 4, pp. 38-42 (October, 1946). 
"Wings for the World, by Douglas," Douglas Airview, Vol. XIII, 

No. 8, pp. 14-19 (October, 1946). 

Index. A management report customarily concludes with 
an index, particularly when of a technical nature including 
involved data. In brief reports the table of contents usually 
takes the place of an index. 

An index is constructed to show in alphabetical order 
organized references to important data in the manuscript. It 
includes subjects, definitions, formulae, principles, and names. 
The index is usually set up in two columns, single-spaced. 

Standardization of Reports. An enterprise usually requires 
a large number of reports, and it is considered good manage- 
ment practice to standardize reports so that they may be filed 
by type and in sequence. 

A well-organized, neat report gives a reader a good im- 
pression and a desire to read the manuscript. It is customary 
to type the final report on a standard 8.5xn-inch, white 
bond paper, with appropriate carbon copies of the same size 
paper. Colored typewriter ribbons can be used very effectively 
to signify different classes of reports. Although the size of 
paper should be uniform, it is permissible to use folded inserts 
such as charts and maps. 

The report should be typed in double space and written 
on one side of the paper only. Quotations should be typed 



single-spaced and indented three-quarters of an inch from both 

Margins of typewritten manuscripts, secured in spring 
binders on the left-hand side of the paper, are one and a half 
inches on the left-hand side; three-quarters of an inch on the 
right-hand margin; one inch from the top of the page; and 
three-quarters of an inch at the bottom of the page. If the 
manuscript is fastened at the top of the pages, the side margins 
are usually three-quarters of an inch each. Paragraphs are in- 
dented one-half inch from the type margin. 

Pages of the body of the manuscript, including the appendix, 
bibliography, and index, are numbered consecutively in Arabic 
numerals, near the right-hand, top corner of the page, with 
the exception of those pages where a new chapter starts, and 
in this case the number is in the center of the bottom margin 
of the page. 

The title page, preface, table of contents, and lists of illus- 
trations should be numbered in small Roman numerals, placed 
in a similar position to page numerals used in the body of the 
text material. 

Newspaper Footnotes. The newspaper is a fertile field of 
current business data. Researchers frequently make reference 
to newspaper articles in their reports but fail to footnote their 
citations correctly. 

The footnote for a quotation from a newspaper used in a 
report should show the title of article, (if not mentioned in 
context of the report) name of newspaper, place of publica- 
tion, (when not signified by name of paper) page number, and 
date of issue. Editorials and other special news items should 
be so designated. News items should not be listed in bibliog- 
graphy. Examples: "New Capital Market," The New York 
Times, p. 20, April 30, 1949. Editorial, West Orange (New 
Jersey) Chronicle, p. 10, April 20, 1949. 






Appropriate Subjects for 
Research and Study' 

This is an inclusive list of appropriate subjects for research and 
study on any topic, or prior to the location of a business concern. 
The items to be selected from it in any particular instance will 
depend upon the time available for research and the nature and 
size of the business. 

I. Historical Sketch of Area 

A. Origin 

1. Date 

2. Circumstance of first settlement 

a. Nativity and other characteristics of settlers 

b. Difficulties and accomplishments 

B. Early Development and Factors Influencing Growth 

1. Topographic and climatic influences 

2. Trade routes and transportation 

a. Rivers and harbors 

b. Canals 

c. Overland routes 

d. Railroads 

e. Airlines and airports 

3. Native resources, accessibility of 

a. Supplies for consumption 

b. Materials facilitating* employment 

1 Adopted from, "An Outline for Making Surveys," Economic Series 
No. 34, op. cit. (May, 1944), pp. 13 ff. 




4. Power, initial sources 

a. Water 

b. Fuel 

5. First market outlets 

6. Predominating human influences 

7. Other important features 

C. Type of Characteristic Activity Developed (industrial, 
commercial, educational, etc.; analysis of reasons for 
that type of development) 

II. Location 

A. Geographic 

B. Physical Features Pertinent to Present-Day Industry 
and Trade 

1. Topographic influence 

a. Mountains 

b. Rivers 

c. Lakes 

d. Soil 

e. Filled-in swamp land, former dump area 

f. Subsoil (examination of— for construction foun- 

2. Climatic characteristics 

a. Temperature, mean average per month, etc. 

b. Rainfall, amount and seasonal tendencies 

c. Relative humidity 

d. Sunshine 

e. Wind, storms, cyclones 

f. Fog 

g. Snow and ice 

h. Floods 

3. Scenic attractions (influencing tourist trade) 

C. Location in Relation to: 

1. Important resources (see IV below) 
a. Raw materials 

i. Agricultural (crop productions, dairy prod- 
ucts, animals, etc.) 

ii. Mineral (kind, records of production, etc.) 



iii. Forests (available supply, commercial uses, 

iv. Fish (availability, commercial uses, etc.) 

v. Other 

b. Fuel resources 

i. Coal— anthracite, bituminous, etc. 

ii. Petroleum 

iii. Gas— natural, coal 

iv. Coke 

v. By-product (wood, oil sludge) 

c. Water supply (source and reliability) 

i. Volume available (as a source of power; tur- 
bine, boiler, condenser) 

ii. Quality (drinking, process, cooling, etc.) 

iii. Treatment (chemical, etc.) 

2. Labor (see VII below) 

3. Markets (consider factors under Transportation 
Facilities, XVI below) 

a. Industrial (local, regional, national; relate to VI 

b. Wholesale (relate to XII below) 

c. Retail (relate to XIII below) 

d. Export (principal commodity exports, etc.) 

D. Other (such other factors as have special significance) 

III. Population 

A. Number of Persons 

1. Total in metropolitan area (as close an estimate as 
can be made for the corporate city and such exten- 
sions into the surrounding area as are covered by the 
survey; see XIIIB below) 

a. Male 

b. Female 

c. Number classified as to age, sex, and race 

2. Total in corporate area 

B. Percentage of Total for the United States, the City, 
Region, or Other Area (such comparisons, if any, as 
may apply to the purpose of the survey) 



C. Number of Families 

1. Total in metropolitan area 

2. Total in corporate area 

£ D. Growth (steady, rapid, etc.) and Status (permanent, 
temporary, etc.) of Population 

i. Total increase or decrease in population during past 
ten years; past twenty years 

E. Composition 

1. Race 

2. Native white 

3. Predominating nativity of foreign-born 

F. Literacy 

G. Other Factors (such additional characteristics as may 
be important to the local situation) 

IV. Materials Required by Industry (availability and 
cost factors, all important facts peculiar to the individual 
situation, with such comparisons with other districts as 
may apply) 

A. Raw Materials (see IICi) 

B. Products of Other Industries (kinds readily obtainable 
—semi-manufactured goods, equipment, supplies, etc.) 

C. Construction Materials and Supplies (cement, brick, 
tile, sand, stone, lime, steel beams, reinforcement steel, 

V. Power 

A. Sources 

1. Purchased power from public utilities 

2. Produced by enterpriser's own power plant 

a. Water 

b. Steam 

c. Internal combustion 

d. Electricity 

B. Rates and Regulations 

1. At time of survey 

2. Changes within recent years 



3. Changes provided for, or under consideration 

4. Comparisons with other relevant areas 

C. Changes in Local Facilities for Serving Industry and 
Commerce (all important changes on which informa- 
tion is available) 

D. Present Favorable and Unfavorable Features of Local 
Facilities from the Point of View of the: 

1. Community 

2. Supplier 

3. Individual industries 

E. Adequacy of Supply to Meet Industrial Growth 

F. Other Facts of Importance with Respect to the Local 
Situation (provisions insuring reliability of supply, 

VI. Industrial Development 

A. General Production (statistics and related factors) 

1. Number of establishments 

2. Number of wage-earners 

3. Amount of wages 

4. Cost of materials, fuel, and purchased electric 

5. Value of products 

6. Value added by manufacture 

7. Trends in 

a. Total value of products 

b. Total number of wage-earners 

c. Total amount of wages 

8. Percentages of total population in the United States, 
in region, or in state (or such comparisons with 
other areas as may be significant) 

9. Principal markets supplied (relate to XVI below and 
IIC3 above); percentage of materials bought from 
local sources and percentage of manufactures sold 
to local agencies, provided the local situation seems 
to warrant a direct inquiry into factual data and this 
information is essential to consideration of the in- 
dividual problem) 



10. Waste products (utilization, disposal, and disposal 

B. Individual Industries 

1. Production statistics of each important industry 
now in operation (present volume of production in 
terms of number of units, value of products, number 
of wage-earners, capital invested, etc., and trends 
within recent years; the national trend with respect 
to each industry— apparently overdeveloped or un- 

2. Number and kind of important new industries locat- 
ing in the area within the past five years, or other 
periods of interest; reasons for locating 

3. Number and kind closed down or leaving the area 
to operate elsewhere within the period considered 
under B2; factual information concerning reasons, 
insofar as available 

a. Seasonally 

b. Temporarily (exclusive of normal season clos- 

c. Permanently 

4. Important industries that have continued in opera- 
tion over a long period of years; to which perma- 
nence is ascribed 

C. Other (such additional facts characterizing the local 
situation as may be essential to a comprehensive analy- 
sis of the present industrial status; the industrial advan- 
tages or disadvantages as compared with comparable 
areas; recent trends; future possibilities) 

VII. Labor Situation 

A. Adequacy of Labor Supply 

1. Skilled, semiskilled, or unskilled 

2. Type of skills and trades 

3. Number of persons skilled in each trade 

4. Male, female 

5. Resident, transient, predominating nationality 

6. Religious affiliation 



7. Situation in surrounding territory (neighboring 
reservoir of labor from which to supplement local 
supply, if necessary; special conditions giving rise 
to this supply; type of labor available, such as un- 
skilled farm hands, semiskilled, or skilled labor re- 
sulting from neighboring shift in industry, etc.) 

8. Related factors (such as labor turnover, efficiency, 
training, facilities) 

B. Wage Scale, as Compared with Scale in: 

1. Each of recent years 

2. Similar areas 

3. Similar trades 

C. Laws and Local Regulations 

1. Wage rates 

2. Hours of work 

3. Labor conditions 

4. Changes in recent years 

D. Labor-Unions 

1. Organization and membership 

2. Attitude toward each other 

3. Type of leadership 

4. Financial resources 

E. Relations between Management and Labor 

1. Record of strikes 

2. Cause for strikes 

3. Results of strikes 

4. Duration of strikes 

5. Feeling of labor toward management as a result of 

6. Feeling of labor toward union leaders as a result of 

7. Free or closed shops 

8. Lockouts by management (causes and results) 

F. Special local efforts to maintain satisfactory conditions 
(working, living) 

G. Other facts (uninterrupted absence of labor troubles 
or harmonious settlement of well-known local contro- 
versy; recent improvements in methods of payment, 



VIII. Employment and Unemployment (closest pos- 
sible estimates where specific data cannot be made 

A. Number Gainfully Employed (exclusive of employees 
paid from relief funds) 

1. Total number, by: 

a. Race (white, Negro, other) 

b. Nativity (native white, foreign-born white) 

c. Sex 

d. Age (under 16 years, between 16 and 21) 

2. Gainful workers per family (average) 

3. Comparisons with other areas, or with the United 
States as a whole (what comparisons will be most 
helpful depends upon the size, type, and location of 
the area and the purpose of the survey) 

B. Principal Sources of Employment (industrial plants, 
commercial establishments, etc., in the order of their 
importance in number employed) 

C. Recent Trends toward Increased or Decreased Em- 
ployment with Respect to Each Principal Source of 
Employment (as derived from such data as are avail- 
able for the current year and preceding years) 

D. Unemployed Employables 

1. Number of emergency workers (paid from relief 
funds) with such breakdown as is possible by race, 
nativity, sex, etc., and duration of employment 

2. Number totally unemployed 

3. Number partially employed 

4. Percentage formerly employed in local: 

a. Industry 

b. Wholesale trade 

c. Retail trades 

d. Service trades 

5. Percentage never employed on a full-time basis in 
any local occupation 

E. Other (such other facts as may be peculiar to the local 
unemployment situation) 



IX. Consumer Purchasing Power (estimated income, in 
dollars, of individuals and families, considered in relation 
to cost of living) 

A. Wages, Salaries, Commissions, etc., and Business In- 
come from Occupation (with a breakdown, if locally 
feasible, by the following sources of income:) 

1. Agriculture (such income as residents in the survey 
area may derive from the surrounding farm area) 

2. Mining (such income as may be derived from coal 
and other mining activities by residents of the sur- 
vey area) 

3. Electric light and power, gas, water 

4. Manufacturing 

5. Construction 

6. Transportation 

7. Communication 

8. Trade 

9. Finance 

10. Government 

11. Service 

12. Miscellaneous (all other sources— wages, salaries, 
commissions, etc., and business income) 

B. Interest from Savings Accounts in: 

1. Banks 

2. Postal savings 

3. Building and loan associations 

4. Other depositories 

C. Net Income from Investments 

1. Owned real estate 

2. Stocks and bonds 

3. Miscellaneous (royalties, shares in co-operative 
establishments, etc.) 

D. Other (all other known sources of local income, such 
as direct relief, insurance, etc.) 

E. Estimated per Capita or per Family Income 

F. Distribution of Family Income by Size of Income 
(relative number of families having income below 
$1,000, $1,000 to $2,000, etc.) 



G. Trends in Income in Recent Years (general increase or 
decrease; increase or decrease in relation to changes 
in local cost of living; with respect to income from 
various industrial categories; for various types of in- 
come, such as wages and salaries, investments, interest 
on savings, etc.; and in distribution by size of income) 

H. Comparisons with Other Communities or with the 
United States as a Whole (general conclusions to the 
extent of such supporting data as may be obtainable) 

I. Peaks and Levels (seasons or months during which 
local income is normally highest; normally lowest) 

J. Payroll Methods (general analysis concerning the 
timing of paydays for full-time wage-earners and sala- 
ried employees in factories and other establishments) 

K. Other (other outstanding characteristics) 

X. Living Costs, Standards and Conditions, and Re- 
lated Indexes of Consumer Use of Buying Power 

A. Living Costs (price trends on consumer goods) 

r. General average (as compared with other places) 

2. Commodity price for food, clothing, etc. (average 
for year) 

3. Trends (comparisons with previous years sufficient 
to reveal general trends in local living costs) 

4. Other data on living costs (indicative of specific 
local advantages or limitations— fresh fruits and 
vegetables at reasonable cost, etc.) 

B. Family Expenditures 

1. Kinds of goods and services used (by consumers of 
various income classes) 

2. Average expenditure for major purposes (estimated 
annual expenditure) by income classes 

3. Comparisons (such as are possible with other years 
and other areas) 

4. Other data of special local significance 

C. Housing (to be considered together with XI below) 
1. Number of occupied dwellings 

a. Percentage occupied by owners 



b. Distribution of home-owners by lower, middle, 
and upper income levels (estimates) 

c. Average value of owner-occupied dwellings; 
recent trends 

d. Age of dwelling units 

2. Rent (average for year per dwelling unit) as com- 
pared with other places; estimates, if possible, as to 
average rents paid by families of the various income 
classes and as to trends in average yearly rent in 
relation to changes in family income 

3. Light, heat, water, and telephone service 

a. Rates charged for home use; comparison with 
other places 

b. Recent local changes in rates or service 

c. Other points of special interest 

4. Modern improvements in homes {situation with 
respect to:) 

a. General adequacy of plumbing 

b. General adequacy of heating 

i. Number of oil-burners 

ii. Coal-burning units 

iii. Gas-burning units 

c. Number of installed air-conditioning units 

d. Other 

5. Other data (such as may be essential to a true pic- 
ture of the local housing situation) 

D. Related Indexes of Consumer Use of Buying Power 

1 . Number of telephones 

2. Number of registered automobiles 

3. Number of domestic electric meters 

4. Number of families having radios 

5. Circulation of newspapers 

6. Circulation of magazines 

7. Trends (Di to 6 inclusive) 

8. Other indexes (pertinent data are also included un- 
der XVIII, Banking and Finance, Insurance; 
XIII, Retail Trade and Metropolitan Shopping 
Area; and XI, Construction and Real Estate) 



9. Comparisons (Di to 8) with other cities or regions 
and with previous years (sufficient to indicate trends 
in local increase or decrease, also trends in terms of 
relationship between increased or decreased popu- 

E. Other Data Pertinent to the Local Situation 

XI. Construction and Real Estate 

A. Construction (by kinds of business— census classifica- 
tion; general contractors for building, highway, and 
heavy construction; special trade contractors, such as 
carpentering, concreting, electrical, excavating; heat- 
ing and plumbing, roofing and sheet metal, etc.) 

1. Number of contracting establishments 

2. Nature of work performed (dollar volume per 

3. Number of active proprietors and firm members 

4. Number of employees (average per year) 

5. Payrolls (dollar volume) 

6. Cost of materials, brick, cement, lumber, steel, and 
all other materials (actual or estimated dollar vol- 
ume per year) 

7. Comparison of local construction costs with similar 
costs in other localities where comparable informa- 
tion is available 

B. Building Permits (total number per year and dollar 

1. Residences 

a. One-, two-, and three-family units (by cost 

b. Apartments 

c. Hotels 

2. Office buildings, retail stores, etc. 

3. Industrial structures (factory buildings, etc.) 

4. School buildings, churches, theaters, municipal 
buildings, etc. 

5. Other (comparisons with other cities, etc.) 

C. Demolition and Conversion Permits (with such break- 
down as is important) 



D. Number of Vacant Buildings by Areas (classified as to 
residences of various types, office buildings, manufac- 
turing plants, etc.; data on general condition of vacant 
buildings sufficient to indicate relationship to construc- 
tion need) 

E. Building Regulations, Local and State, Affecting Local 
Building Activity (zoning, etc.) 

F. Trends in Local Construction (as indicated by such 
statistics for preceding years as are available) 

G. Number of Real Estate Figures, average number of 
employees for the year, actual or estimated total wages 
and salaries paid. 

H. Real Estate Sales, Mortgages, etc. (for latest year of 
record; comparisons with preceding years sufficient to 
indicate general trends) 

1. Number of sales and dollar value of property sold 

2. Number of mortgages recorded and total amount 
of mortgage debts 

3. Number of foreclosures 

I. Real Estate Taxes (details to supplement general data 
under XXVII, Municipal Administration and Re- 
lated Data) 

J. Rent (considered under XC, Housing) 

K. Real Estate Prices (general trend during recent years) 

L. Supply of Improved and Unimproved Properties (for 
home building and industrial and commercial expan- 
sion; available plant site, whether close to railroad, 
river crossing, or possessing other advantageous in- 
ducements to industries for which the area is suited) 

M. Other (such additional facts on construction and real 
estate as are of special significance to the community) 

XII. Wholesale Trade 

A. Number of Establishments 

1. Total (all establishments operated by "wholesalers" 
as defined in the latest census of business) 



2. By types of organizations 

a. Full service and limited function 

b. Manufacturers' sales offices and travelers 

c. Bulk tank stations (independents and chains en- 
gaged primarily in the storing and wholesale 
distribution of petroleum products) 

d. Agents, brokers, commission merchants, etc. 

e. Assemblers (cream stations, grain elevators, 
co-operative marketing associations, and other 
buyers and sellers of farm products on a whole- 
sale basis) 

3. By kinds of business (grocery, drug, etc.) 

a. Independent 

b. Chain 

B. Employment 

1. Total number of employees (average per year) 

2. Number of employees in each kind of business 
(average per year) 

3. Seasonal tendencies 

C. Payrolls (total per year) 

1. Part-time 

2. Full-time 

D. Sales 

1. Total (dollar volume per year) 

2. By kinds of business (dollar volume per year) 

3. Seasonal tendencies in sales volume 

E. Local Regulations 

F; Number and Kind of New Establishments (between 
the period covered by the last census of business and 
that covered by the preceding census, or during some 
other recent period for which comparable records may 
be available) 

G. Business Failures (within the period referred to under 

H. Other Facts (special characteristics affecting wholesale 
distribution through local establishments, such as 



recent trends toward co-operative wholesaling or other 
developments of importance) 

I. Importance of the Area as a Wholesale Trading Center 
(if the area is not already an important wholesale 
center, relate this subject to significant facts under 
Location with respect to wholesale markets, item 
IIC 3 b) 

XIII. Retail Trade and Metropolitan Shopping Area 

A. Retail Trade 

1. Number of establishments 

a. Total (all types and kinds of retail outlets) 

i. Independent 

ii. Chain (national, sectional, and local) 

iii. Other 

b. By kinds of business (grocery, drug, hardware, 

2. Employment 

a. Total number of employees (average for year) 

b. Number of employees in each kind of business 

c. Seasonal tendencies 

3. Payrolls (total per year) 

a. Part-time 

b. Full-time 

4. Sales 

a. Total (dollar volume per year) 

b. By kinds of business (dollar volume per year) 

c. Per capita sales 

d. Comparisons with comparable data 

i. In preceding census 

ii. For other localities 

e. Seasonal tendencies in sales volume 

5. Approximate capitalization or size of leading stores 
(if a particularly important local feature) 

6. Store operating expenses (such comparisons as may 
be possible with respect to those in other localities) 

7. Uniformity of store policies (with respect to credit, 
returned goods, advertising, frequency of deliveries, 



8. Attitude of principal stores toward each, other 
(generally co-operative or otherwise, as indicated 
by membership in local organizations, such as cham- 
bers of commerce, retail credit associations or other 
credit agencies, etc.) 

9. Local regulations 

10. Store locations in general with respect to shopping 
areas (downtown, suburban, etc.) in relation to 
trends in population within the area and to con- 
venience to customers 

1 1. Number and kind of new establishments within the 
period covered by the preceding census, or during 
some other recent period for which comparable 
records may be available 

12. Number of business failures within the period re- 
ferred to under XIIIA11 

13. Other facts (such as principal wholesale sources of 
locally retailed foods, clothing, and furniture, if the 
local situation seems to warrant a direct inquiry on 
this point) 

B. Metropolitan Shopping Area 

1. Consumer buying "radius" in square miles as indi- 
cated by such measures as density of population in 
suburban areas (census method), extent of city's 
newspaper distribution, retail store deliveries, and 
use of the city's internal transportation facilities 

2. Extent of suburban customer patronage of down- 
town stores 

3. Patronage of local stores by consumers from other 

4. Other important considerations 

XIV. Buying Habits of Local Consumers 

A. Proportion of Cash Purchases to Total Purchases; 
comparisons with other communities; apparent trends 
with respect to installment buying 

B. Apparent General Preferences as to Shopping Hours 
of the day, days of the week, and time of the month 
consider in relation refer to IXJ 



C. Buying in Other Places by Local Consumers 

1. Estimated percentage (of total purchases) bought 

2. Classes of goods most frequently bought elsewhere 

3. Names of cities from which goods are frequently 

4. Recent trends in connection with extent of outside 

D. Other Important Characteristics (applying to an analy- 
sis of why trade is lost to or gained from competing 

XV. Service Establishments, Hotels, Places of 

A. Service Establishments, by Kind of Service (census 

1. Number of establishments (recognized places of 

2. Number of employees (average per year) 

3. Payrolls (dollar volume per year) 

a. Full-time 

b. Part-time 

4. Receipts for the year (in cities covered by census 
reports, at least) 

5. Seasonal tendencies of importance 

6. General trends within recent years (in number of 
employees and in other factors suggested by the 
local situation) 

B. Hotels, Tourist Courts, and Tourist Camps 

1. Number; date of establishment, size, and other gen- 
eral description 

2. to 5. (as suggested for XVA2 to 5 inclusive) 

6. Rates 

a. Current rates 

b. Principal trends 

c. Comparisons with rates in comparable places 

7. Recent general trends in volume of business 

8. Number of first- and second-class establishments 
closed within recent years 



9. Other facts of significance (construction facilities; 
see XXI A; home residence of hotel guests, etc.) 
C. Places of Amusement (amusement parks, athletic fields, 
skating rinks, bathing beaches, billiard and pool par- 
lors, dance halls, theaters, etc.) 

1. Description of principal places 

2. to 5. (as suggested for XVA2 to 5 inclusive) 

6. Recent trends in volume of business 

7. Other facts of importance to the community 

XVI. Transportation Facilities 

A. Railway 

1. Number and names of railways serving the city 

2. Passenger traffic 

a. Number of trains daily (convenience as to time 

b. Outgoing 

i. Average number of passengers (per day, 
week, or month) 

ii. Important destinations (points to which 
largest numbers of tickets are sold) 

iii. Seasonal tendencies 

3. Freight traffic 

a. Total number of trains daily (convenience as to 
time schedule) 

b. Number of through trains daily (direct routes 
to market) 

c. Number of freight yards 

i. Yard-track miles (sidings adjoining plants) 

d. Volume of freight handled (in carloads or tons) 

i. Comparison between estimated volume of 
incoming and outgoing freight 

ii. Other facts bearing on economical accessi- 
bility to markets (freight comparisons— pref- 
erential and nonpreferential rates to principal 
points, etc.) 

e. Number of stations for each railway 

f. Extent of "pick-up and delivery" freight service 

4. Freight warehouses 
a. Number 



b. Capacity 

c. Ownership (railway-owned, etc.) 

5. Additional data indicating special or unusual facili- 

6. Important developments or changes within recent 

7. General trends in volume of business (passenger and 

8. Other facts significant of the local situation (travel 
time to important points, etc.) 

B. Water 

1. Number and names of lines 

2. Markets served and frequency of service (by ocean, 
lake, river, and canal) 

a. Domestic 

i. Name of markets 

ii. Number of sailings to each port (during 
week, month, or other specified period) 

b. Foreign (name of markets, number of sailings to 
each port) 

i. Direct to foreign markets 

(a) Under American flag 

(b) Under foreign flag 

ii. Indirect to foreign markets (by transship- 
ment at other ports, domestic or foreign) 

3. Volume of trade 

a. Outgoing 

i. Domestic 

ii. Foreign 

b. Incoming 

i. Domestic 

ii. Foreign 

c. Terminal facilities and service 

i. Number of piers, number of berths, dry- 
docks, etc. 

ii. Warehouse facilities 

(a) Number of bonded warehouses 

(b) Special data (such as capacity, owner- 
ship, etc.) 


iii. Lighterage facilities 

iv. Port development, not elsewhere specified 
(data such as depth of water, bunker coal 
supply, fuel oil supply, fresh water supply, 
anchorage facilities, and other local develop- 
ments of importance to shipping companies) 

v. Customs house 

vi. Foreign consular service 

4. Other data of importance 

5. Important developments or changes within recent 

6. General trends in water transportation (volume of 
business, etc.) 

C. Air Service 

1. Ownership or control 

2. Localities served 

a. Directly 

b. Travel time to important points 

3. Frequency of flights 

a. Mail, express, and passenger 

b. Approximate volume of traffic 

i. Outgoing 

ii. Incoming 

4. Airport (city's accessibility to) and other special 
facilities (such as lighting, radio communication, 
weather reporting, public conveniences, etc.) 

5. Important developments or changes within recent 

6. General trends (in volume of business, etc.) 

7. Other important facts 

D. Highway Transportation 

1. Principal highways 

a. Primary (main interstate routes) 

b. Secondary and county 

c. Condition of road surfaces 

d. Extent of road improvement in recent years 

e. Other features of importance 

2. Motorbus and motortruck service (intercity, inter- 
state, etc.) 



a. Number and names of companies 

i. Number of units in operation (total or by 
each company, number of routes covered, 
mileage, etc.) 

ii. Cities served by each line (points on routes 
of particular importance to the area being 

iii. Number of daily or weekly trips 

iv. Approximate volume of freight handled 

(a) Outgoing 

(b) Incoming 

v. Average number of passengers carried (esti- 
mated per week or month) 

(a) Outgoing 

(b) Incoming 

b. Special terminal facilities 

c. Recent trends (volume of passenger and freight 
business to and from the city, etc.) 

3. Important developments or changes (equipment 
service) within recent years 

4. Other facts of importance 

E. Electric Car Service (interurban) 

1. Number of lines (passenger, freight, or both) 

a. Cities serviced by each line 

b. Number of daily or weekly trips 

2. Average volume of business (per day, week, or 

a. Passenger 

b. Freight 

3. Recent trends 

4. Other data of local importance 

F. Pipe-Line Facilities (for transportation of oil, gas, etc., 
to or from the area) 

1. Number and names of lines 

2. Cities served by each line (points of particular im- 
portance to the area that is being surveyed) 

a. Gathering lines 

b. Trunk 



3. Capacity 

4. Products carried (fuel oil, gas, etc.) 

5. Volume of shipments (to or from the city) 

6. Developments within recent years 

G. Comparisons (if pertinent to local problems) of Types 
of Transportation Facilities, as to: 

1. Rates (passenger and freight) 

2. Convenience 

3. Trends toward increased or decreased business 
within recent years 

H. City's Internal Transportation Facilities 

1. Streetcar service 

a. Ownership (public or private) 

b. Average daily number of passengers 

c. Number of miles of track, or route 

d. Routes, from the point of view of affording the 
best service to the community 

e. Rates (of fares) 

f. Important developments or changes within re- 
cent years in 

i. Service 

ii. Rates 

iii. Types of equipment (change from two-man 
to one-man type of car; change from surface 
traffic to subway or elevated; etc.) 

iv. Average daily number of passengers (general 
trend toward increase or decrease) 

g. City regulations 

h. Other (special features of the local situation) 

2. Bus lines (same points as for streetcar service) 

3. Co-operative delivery service (or other special mer- 
chandise delivery facilities for serving the area) 

4. Other facilities of importance (taxicab service, etc.) 

I. Other (all other significant facts concerning transpor- 
tation facilities in relation to present and potential 



XVII. Public Warehousing 

A. Statistics by kind of warehousing establishments 
(household goods, general merchandise, farm products, 
cold storage, etc.) 

1. Number of warehouses 

2. Storage rates for principal commodities 

3. Number of employees (average for year) 

4. Payrolls (dollar volume) 

5. Revenue (estimated total for year, all warehousing 

6. Total local revenue and employment as compared 
with similar totals for the region in which the com- 
munity is located or with other regions 

7. Recent changes in number of warehouse establish- 
ments, firms going out of business, or new ware- 
houses established 

8. Adequacy or inadequacy of present public ware- 
housing facilities 

B. Seasonal Tendencies in Warehousing (month or 
months with highest dollar volume of business, lowest 
dollar volume; largest number of employees, smallest 
number of employees, etc.) 

C. General Trends in Volume of Business Within Recent 

D. Other Facts of Importance 

XVIII. Banking and Finance, Insurance 

A. Banks 

1. Names of principal banks, dates of establishment, 
and description of each as to kind— national, state, 
private, mutual savings, industrial, federal reserve, 
joint stock, land, and foreign banking agencies; also 
classified as to "unit" or independent banks and 
branch banks 

2. Total number of banks 

3. Employment and payrolls (per year) 

a. Average number of executives (including presi- 
dent, vice president, cashier, assistant cashiers, 



treasurer, assistant treasurers, and chairman of 
board of directors if actively engaged on a salary 


b. Average number of other employees 

c. Total salaries, wages, bonuses, and all other pay- 
ments to officers and employees (dollar volume) 

4. Rank of the largest bank in relation to other banks 
in the federal reserve district, state, etc. (or other 
helpful comparisons) 

5. Bank deposits (number of accounts and dollar vol- 
ume per year) 

6. Total loans and discounts (dollar volume per year), 
total assets 

7. Interest rates 

B. Financial Institutions Other than Banks (security 
brokers and dealers, federal savings and loan associa- 
tions, state building and loan associations, installment 
finance companies, personal finance companies, mort- 
gage and farm mortgage companies, and miscellaneous, 
such as commodity exchange and bank clearing house, 
etc.) ~ 

1. Description of important institutions 

2. Employment and volume of business per year of all 
such institutions 

C. Insurance and Brokerage Offices (identifiable as busi- 
ness establishments) 

1. and 2. (as suggested for Bi and 2 above) 

D. General 

1. Total loans through all locally established financial 
institutions (dollar volume per year); or sufficient 
data to indicate the trend toward increase or de- 

a. Loans to business firms or other business organi- 

b. Loans to individuals and families 

2. Comparisons, if possible, to show the general trend 
in interest rates, employment, volume of business 
and business failures, in local banking, finance, and 
insurance institutions 



3. Other (such additional information as may be of 
significance in considering the local situation, par- 
ticularly with respect to abilities and inclinations 
of banks to extend credit to industrial and commer- 
cial enterprises; trends in total dollar volume of 
savings accounts) 

XIX. Professional Service (physicians, dentists, lawyers, 

A. Number Engaged in Professional Work (Other than 
Trading) by: 

1. Kind of profession 

2. Sex 

B. Revenues (per Year) Estimated, or Known Income 
from Professional Work 

C. Employment and Payrolls (per Year) 

1. Number of employees (office assistants, etc.) 

2. Salaries and wages (dollar volume) 

D. Comparisons with Other Years of Record (sufficient 
to indicate trends in average fees charged and trends 
in the relation between available service and local 
requirements in each field) 

E. Other Important Data 

XX. Newspapers, Radio Stations 

A. Newspapers 

1. Names of papers 

a. Dailies (classified as to morning, evening, other, 
and as to Democratic, Republican, Independent, 

b. Weeklies 

2. Revenues from: 

a. Subscriptions 

b. Newsstand sales 

c. Advertising 

3. Employment and payrolls (per year) 

a. Number of executives, and contributors (aver- 



b. Number of other employees (average) 

c. Salaries and wages (dollar volume) 

4. Largest circulation area (square miles covered by 

5. Important changes or trends within recent years 

a. Amount of increase or decrease in largest cir- 
culation area 

b. Number and kind of papers added or discon- 

c. In equipment 

d. Advertising rates and volume 

e. Activities and influence (co-operation on local 
surveys, charity drives, etc.) 

6. Other significant features (such dates of establish- 
ment as are of interest, etc.) 

B. Radio Stations (essential details as to names of stations, 
ownership and employment, revenues, and wattage; 
and significant trends as to importance as an advertising 
medium, etc.; any additional details— such as suggested 
for newspapers— that apply to the community's radio 

XXI. Expositions, Fairs, and Conventions 

A. Local Facilities (consider convenience and adequacy 
of assembly places and equipment; all other local fea- 
tures that may appreciably influence patronage; see 

B. Nature of Assemblies (annual, occasional, or perma- 
nent expositions, fairs, trade shows, etc., of importance 
to the community considered from the angle of em- 
ployment, revenue, type, and extent of outside patron- 
age, advantages to business and industry, etc.) 

C. Other (allocation of responsibility for attracting con- 
ventions; extent of general co-operation within the 
community, etc.; see also XVIA2 and XVIH) 

XXII. Industrial and Commercial Associations 

(chambers of commerce, commodity and technical 
associations, grain exchanges, etc.) 



A. Names of All Associations and Institutes Having With- 
in the Area an Established Place of Business (classified 
as to national, regional, state, or local, and by nature 
of service) 

1. Local membership (generally representative of the 
local business or industry served, or limited in rep- 

2. Number employed (average per year) 

3. Payrolls (dollar volume per year) 

B. Effectiveness (of organizations concerned with local 

1. As aid to established local business and industry 

2. In advancing harmonious and co-operative relations 
with neighboring communities 

3. As factual authorities concerning the kinds of new 
industries and business establishments desirable from 
the point of view of successful development of each 
industry and of the community as a whole 

4. In promoting the location of suitable industries and 
commercial establishments and in discouraging po- 
tential industries under conditions of limited oppor- 

XXIII. Universities and Other Institutions (state, 
county, etc., having appreciable enrollments from 
other communities; other schools are covered under 
XXVIIIC below) 

A. Universities, Colleges, Academies, and All Other Edu- 
cational Institutions Drawing a Transient Population 

1. Description of each important institution; date of 
establishment; special features attracting a student 
population, etc. 

2. Enrollment 

a. Total per year 

i. From local population 

ii. From other communities 

iii. By age groups (sufficient to indicate pre- 
dominating types of consumers brought in 
through these institutions) 



b. Highest enrollment per month 

c. Lowest enrollment per month 

3. Revenue (dollar volume per year) 

a. Tuition fees 

b. Other (classified as to source) 

4. Recent trends in enrollment and revenue 

5. Economic importance of these educational institu- 

a. Employment and payrolls (per year) 

i. Number of teachers and administrators 

ii. Number of other employees by types of 
employment (average) 

iii. Payrolls (total dollar volume) 

b. Estimated expenditures within the metropolitan 
area for supplies, services, and materials necessary 
for operation (dollar volume per year) 

c. Estimated total expenditures within the metro- 
politan area (exclusive of expenditures going to 
the institutions of the enrolled individuals in- 
drawn from other communities) 

6. Other significant data (capacity in relation to trends 
in enrollments, etc.) 

B. Federal, State, or County Hospitals, Asylums, etc. (all 
other than educational institutions largely subject to 
enrollments from outside the area) 
1. and 2. (same type of data suggested under Ai and 
2 above) 

3. Employment and payrolls (per year) 

a. Number of administrative officials and profes- 
sionals (average) 

b. Number of other employees, by types of em- 
ployment (average) 

c. Payrolls (total dollar volume) 

4. Revenue (per year) classified by sources 

5. Estimated total expenditures within the metropoli- 
tan area for supplies, services, and materials neces- 
sary for operation (dollar volume per year) 



6. Other significant data (capacity in relation to trends 
in requirements) 

XXIV. Federal, State, or County Government Estab- 
lishments (for a state capital or a county seat, 
such special establishments and facilities as contrib- 
ute important activities to this type of city) 

A. Description of Each Important Activity and Establish- 
ment (significant details as to extent of employment 
and payrolls per year; extent of permanent and tran- 
sient population brought to the area through these 
activities; consumer characteristics of this population; 
architectural features of buildings, etc.) 

B. Recent Changes or Trends of Importance 

XXV. All Other Types of Establishments and Special 
Features That Tend to Contribute to the Com- 
munity's Employment, Purchasing Power, and 
Consumption (description of each, and significant 
details as suggested under XXIV) 

XXVI. Summarization of Principal State and Local 
Laws and Regulations (affecting industry and 
commerce and consumer purchasing power) 

A. Taxation 

1. Enumeration of state and local laws and regulations 
providing for the levying of fees; franchise taxes, 
business privilege taxes, and other direct taxes, 
against commercial and industrial corporations, etc., 
located in the area; also taxes and special assessments 
on real and personal business property 

2. Enumeration of state and local laws and regulations 
providing for the levying of direct taxes against 
individuals and families residing in the area; also 
taxes on real and personal property (other than 
business property) 

3. State and local excises and other indirect taxes 

4. Recent trends in tax legislation 

5. Tax laws setting up obstacles to interregional trade 



B. Incorporation and Registration of Individuals Using a 
Firm Name (requirements and cost) 

C. Labor Laws and Regulations with Respect to: 

1. Hours and wages 

2. Unions 

3. Other labor factors 

4. Factory laws 

5. Recent trends in labor organization 

D. Banking and Credit 

E. Insurance (restrictions, rates, etc.) 

F. Zoning 

G. Traffic (intracity motortruck regulations, etc.) 

H. Local Laws Regulating Competition; Other Important 

I. All Important Recent Trends in Legislation (those 
not covered above under individual subjects or in- 
cluded under item XXVII below) 

J. Recent Court Decisions of Particzdar Importance in 
the Local Situation 

K. History of Local Taxation with Respect to Avoidance 
of Excessive Taxes on Industry as Compared with 
Industrial Taxes in Other Communities Within the 
Region (such as efforts toward self-sustaining improve- 
ments where feasible, consultation with large tax-pay- 
ing industries preliminary to planning improvements 
involving heavier taxes, etc.) 

XXVII. Municipal Administration and Related Data 

A. Form of City Government (mayor-council, commis- 
sions, council-manager, town meeting; comparison 
with form in comparable cities) 
1. Internal organization and personnel 

a. Departments, boards, commissions (organization 
chart or other enumeration of data showing the 
government setup; departments; number and 
purposes of all boards and commissions and how 



members are selected; what municipal officials 
are elected by the people; what officials are 
appointed by the mayor or city manager) 

b. Number local government employees (total per 
year; estimated number part-time employees) 
classified as to administrative officials and others 

c. Salaries and wages paid from city funds (total 
per year) 

d. Trends in payrolls; personnel layoffs and salary 
cuts, etc. 

2. Recent changes of importance in municipal ad- 
ministration (such as changes in administrative 
organization; personnel administration; financial 
planning; municipal budgeting and accounting; 
public purchasing policies; municipal powers— re- 
cent legislative enactments limiting or increasing 
municipal powers; city planning and zoning pro- 
visions; ordinances relating to retail trade; provisions 
relating to playgrounds and recreation, and public 
welfare; police administration; public works, schools 
and education; public libraries; judicial administra- 
tion; etc.) 

B. Financial Statistics 

1. Revenue receipts for the year, classified as to source 
(general property taxes; special property and other 
special taxes; poll taxes; license taxes; special assess- 
ments; fines; forfeits, and escheats; grants in aid; 
donations; pension assessments; highway privileges; 
rents and interest earnings of general departments; 
earnings of public-service enterprises, etc.) 

a. Total 

b. Per capita 

2. Payments for operation for the year (including 
salaries and wages of personnel), classified as to 
object of payment (such as general government; 
protection to person and property; conservation of 
health, sanitation; highways; charities; hospitals and 
corrective institutions; education; recreation; mis- 



a. Total 

b. Per capita 

3. Total gross debt (at year-end accounting; classified 
as to character of obligations, such as funded or 
fixed, special assessment bonds and certificates, and 
revenue notes); "net indebtedness," or such other 
classification of debt obligations as will adequately 
describe the city government's financial situation 

4. Difference between total revenue receipts and total 
payments for operation in terms of excess or deficit 
(for the latest year of record) 

5. Trends in municipal debt; comparison with other 

6. Financing relief and recovery 

a. Methods used 

b. Trends in number receiving relief from public 
funds (comparison for recent years of record) 

7. Comparisons with other cities 

8. Recent economies effected in local government 

C. Taxation (by kinds of taxes-real estate, poll, income, 
license, etc.) 

1. Current rates, also comparisons with previous years 
sufficient to indicate trends; comparisons with 
comparable areas 

2. Total assessed value of all taxable real estate 

3. Total delinquent taxes for the year (by kind of 
taxes); total accumulated delinquent taxes 

4. Other facts of importance 

D. Utilities Owned and Operated (data as to kind and 
importance of each activity) 

E. Number of Registered Voters (comparisons with num- 
ber registered during preceding years of record) 

F. Other Facts of Significance 

XXVIII. Civic, Social, and Related Facilities and 

A. Clubs, Lodges, Social Service Agencies, etc. (general 
data as to:) 



1. Principal organizations 

2. Nature and importance of influence in the com- 

3. Club nouses and other facilities 

B. Churches (number, classified by denominations of 

C. Schools (exclusive of universities and other institutions 
under item XXIII) 

1. Number, classified as to type (grade, high school, 
public, private, parochial, etc.) 

2. Recent trends in enrollment 

3. Adequacy of buildings and other facilities 

4. Recent trends in public school development (gen- 
eral situation; salary scale of teaching force in public 
schools; such comparisons with other cities as may 
be helpful) 

5. Other facts indicative of educational development 

D. Library Facilities (number and kind— public, private, 
special; adequacy) 

E. Theaters, Motion Picture Houses, etc. 

F. Playgrounds and Parks (description of existing facili- 
ties, as to location, size, accessibility, recent improve- 
ments, adequacy or inadequacy) 

1. Play lots, for children of preschool age 

2. Neighborhood playgrounds, for children up to 14 

3. District play fields, for active play of persons over 
14 years 

4. Athletic fields for organized sports 

5. Small neighborhood parks, for passive recreation 

6. Large parks, for passive recreation 

7. Reservations (large parks left in natural state) 

G. Other Recreational Facilities (golf courses, fishing and 
hunting facilities, etc.) 

H. Special Facilities (central garage, community market, 



I. Relief Facilities 

1. Community Chest or other local provisions 

2. Recent trends in the local relief situation 

J. Health and Safety Facilities and Conditions 

1. Hospitalization and medical care 

a. Description of hospital facilities (other than 
State, county, etc., under XXIIIB) 

b. Provision for free clinics, etc. 

c. Recent trends in rates to patients, developments 
in service and facilities 

2. Vital statistics (birth and death rate for year; facts 
sufficient to indicate trends over a period of years; 
comparisons with other areas) 

3. Water for domestic use (source, adequacy of 
supply, and quality; recent trends in rate scale to 

4. Sewerage and garbage disposal 

5. Fire protection (adequacy, details as to water pres- 
sure, placement of hydrants, etc.) 

6. Police protection (adequacy, details as to measures 
taken to safeguard the community) 

7. Traffic and parking regulations (recent trends to- 
ward increase or decrease in traffic accidents- 
essential details not included under item XXVI) 

8. Sanitary promotion (measures taken to safeguard 
the public from unsanitary conditions in public 
eating places, beauty parlors, barber shops; require- 
ments as to care in the wholesaling and retailing of 
perishable goods, etc.) 

K. Other Important Civic and Social Features 

L. Recent Civic and Social Changes or Trends of Out- 
standing Importance 

XXIX. Important Physical Facilities and Special 
Features Not Elsewhere Described (number 
of miles or blocks of pavement, lighted streets, etc.; 
boulevards, water front, bridges, etc.) 



Third Edition 




* Reproduced by permission of Dr. R. F. Schultz, Director, Hercules Experiment Station. 

Guide to Writing Good Reports 

INTRODUCTION: What is the background of the work 
reported? Why has this work been done? 
PROCEDURE AND RESULTS: What work was done? 
What results were obtained? 

the results mean? What action do they suggest? 
EXPERIMENTAL SECTION: How did you do the 
work? What materials did you use? What were the 
techniques used and the results of each experiment? 

This booklet is published in a limited edition for the exclusive 
use of the technical employes of Hercules Powder Company. 
It was prepared under the general direction of a committee 
consisting of J. Barsha, L. W. Beck, Laura Shorb, and R. T. 
Trelfa. It was written by L. W. Beck and Phyllis K. Schaefer. 


Perfection in report writing is a real asset. Through a suit- 
able report, the author is not only in a position to show others 
the kind of work he can do, but he is also able to demonstrate 
his perspective of the problem. Others are enabled to follow 
the progress of his work and to make suggestions pertinent to 
the development of the program. A brief and clear presenta- 
tion of the essential points saves time for all. Experience has 
shown, as might be expected, that no one is born with a gift 
for perfect report writing. Report writing is an art which 
must be acquired and developed. While some individuals are 
better than others, it appears that all can profit by applying 
rules based on experience. In order to help you to improve 
your reports, this booklet, consolidating a wealth of actual 
experience, has been compiled. Using it in the proper spirit 
should enhance your progress. 

Emil Ott 

The Preparation 
of Reports 


The primary object of all Hercules reports is to furnish up- 
to-date information and to supply facts and recommendations 
which will constitute a basis for decision and action. Reports 
on experimental investigations also serve another important 
and long-range purpose in providing a more intelligible and 
systematic record than exists in original notebook records. 
The importance of this function will be appreciated more 
clearly if it is realized that these reports are the only organized 
record left to the company in return for the large sums of 
money spent annually on research and development. More- 
over, reports are a chemist's best means of selling his work to 
the organization. Since reports provide an important and fre- 
quent contact between the technical worker and other em- 
ployes in the company, the quality of a chemist's reports may 
often be considered in judging his ability. 

Since the purpose of a report is to convey information to 
others for immediate and future use, it must be so written as 
to be understood readily by the qualified reader. If he under- 
stands it, it is good; if not, it is bad. It is important to keep 
this thought in mind while writing. 

In order to write a clear understandable report, it is essential 
first to have a complete grasp of the investigation and results 
being reported. If the writer does not understand the meaning 
of what he has done, he certainly cannot convey its meaning 
to the reader of the report. Secondly, the report should be 
written in brief and simple language, with well-constructed 
sentences and short everyday words except when accuracy 
requires the use of technical terms. Clarity of expression and 
logical order of presentation are equally necessary. 























FILING OF REPORTS ........ 249 










Copyright 1945, by Hercules Powder Company. 



Since all reports contain the same fundamental units of 
thought, an outline has been evolved which should serve as a 
general pattern for every report. Each part has a necessary 
function in the complete presentation of the story, and should 
provide the answers to the following questions: 

Why has this work been done? 

What work was done? What were the results? 

What do the results mean? 

What action do these results suggest? 

The basic outline given below should be used to organize 
a report on any investigation, however complex it may be in 
the laboratory or however theoretical the thought may be. It 
will help to present complex material in a simple and easily 
understood manner. 


Background information, objective, and, if necessary, a litera- 
ture review. 

Procedure and Results 

Brief description of what was done and what results were 

Conclusions and Recommendations 

Significance of results, conclusions to be drawn (if any), and 
recommendations for future work. 

Experimental Section 

Methods, materials, special apparatus, analyses and tests, discus- 
sion and evaluation of results, special procedures, tables, and 

The first three sections, taken together, should form a com- 
plete unit and tell the whole story in a brief but comprehensive 
way. The Experimental Section contains supplementary detail. 




This arrangement facilitates the consideration of the report by 
those persons who are not interested in or who do not have 
time for reading the entire report. Persons who wish to ex- 
amine numerical data for the purpose of checking their accu- 
racy or worth, or for repeating the experimental work, must 
consult the latter part of the report. 

It is usually helpful to label the four basic parts of the report, 
particularly in long reports. Additional clarity can easily be 
obtained by using subheadings for different topics under the 
main headings. 

The final order of presentation is usually not the order in 
which the report is prepared. In fact, it is more conducive to 
a concise and understandable report to write the Experimental 
Section first, then the Procedure and Results, next the Conclu- 
sions, and finally the Introduction. The sections should then 
be rearranged in their proper order. 


• The introduction states the ob jective nr purpos e nf t he work , 
the frnhlpwr. to he solved^ and the questions to he answered . 
At times the statement of the problem is not enough. The 
reader may not possess sufficient information to realize the 
significance of the problem. For his benefit, it is best to give 
some background, or to give a brief resume of knowledge con- 
cerning the problem. This knowledge may be of the type that 
is known to everyone working in the field or it may be the 
result of some recent work reported under another investiga- 
tion. In the latter case, reference should be made to the partic- 
ular investigation. When the review of previous work includes 
numerous references, a bibliography should be given at the end 
of the report. The proper forms for citations are given on 
pp. 245-247. 

An introduction which simply states, for example, that the 
purpose of the investigation is to determine what is the maxi- 
mum amount of propylene glycol that may be nitrated in 
admixture with ethylene glycol and glycerin without causing 



operating difficulties, leaves the reader ignorant of why this 
problem is important. A better introduction explaining the 
significance of the problem would be one that reads: 

As is known, ethylene from olefin gases may be used for 
the production of ethylene glycol. Propylene, however, 
also occurs in olefin gases, along with ethylene, in amounts 
up to 50%, and is not easily removed. If the propylene can 
be left in, the costs in making the glycol will be reduced 
and the cost of the product will be lowered, since a difficult 
and expensive separation process will be eliminated. The 
purpose of this investigation is to determine the maximum 
amount of propylene glycol which can be nitrated in ad- 
mixture with ethylene glycol and glycerin without causing 
operating difficulties. 


This section should include only a brief description of the 
work done. The results should be limited to the most important 

There is always a temptation to handle the description of 
the work done and the results obtained by merely referring 
briefly to tables which properly are a part of the Experimental 
Section. This is an acceptable practice only if the description 
is accompanied by sufficient explanation of the tables to make 
actual reference to them unnecessary. Otherwise, the reader 



must turn to the tables and study them in detail. For example, 
a statement such as the following is inadequate: 

Nitrocellulose lacquers were made using the formulas 
shown in Table i, and tested for hardness and discoloration 
by light. The results of the tests are shown in Table 2. 

This statement leaves the reader without any idea as to what 
the compositions of the lacquers were or how the compositions 
affected the hardness. The following description is better: 
Lacquers were formulated containing 5 parts of nitro- 
cellulose, 5 parts of ester gum, and 0.5, 1.0, 1.5, and 2.0 parts 
of tricresyl phosphate as plasticizer, as shown in Table 1. 
Films were cast on glass plates and tested for hardness with 
the Sward Rocker Hardness Meter, and for discoloration 
by light. The results, which are given in Table 2, show that 
the hardness values decreased and that discoloration indexes 
increased with increase of plasticizer. 

On the other hand, material in tables and graphs should not 
be repeated in detail elsewhere, for the real purpose of a table 
or graph is to save time and space by presenting detailed infor- 
mation in a concise form. 

Another practice to avoid in writing technical reports is 
giving too detailed a discussion of results and conclusions in 
this section of the report. Most of this belongs in the Experi- 
mental Section. In fact, throughout the Procedure and Results 
section of the report the writer must constantly use all the 
discrimination at his command to exclude nonessential mate- 
rial. Only enough material should be included to enable the 
reader to understand the writer's conclusions and recommen- 
dations. All other material is supplementary and belongs in the 
Experiment Section. 


This section contains a short statement of the conclusions 
reached, a condensed discussion, when necessary, of the evi- 



dence leading to these conclusions, recommendations as to 
what future work should be done, and, wherever indicated, 
a summary of what action has been taken to obtain patents. 
The conclusions are the answers to the questions raised at the 
beginning of the report. They are based upon the analysis and 
interpretation of the experimental results. If insufficient work 
has been done or if no conclusions can be drawn at the time 
of the writing of the report, there should be a statement to 
that effect. In the case of some long, continuing investigations, 
a conclusive answer to the problem may not be obtained for 
some time. 


The Experiment Section contains an account of the work 
in such detail that it can be checked or repeated at a later date. 
It should include a description of the reagents, apparatus, and 
experiment methods used, the numerical data obtained, a 
description and results of any analyses made or of any tests 
run, the method of making important calculations, and, if 
necessary for clarity, a detailed discussion of any experiment 
facts which have a bearing on the conclusion or recommenda- 

Reagents. All materials used should be described as to 
purity, source of supply, or method of synthesis if it has been 
necessary to prepare them. It is sufficient to characterize com- 
mon, easily obtainable supplies as pure or commercial or by 
melting point, boiling range, and other details. If the investi- 
gation included experiments with different grades of the same 
material, the different grades may be indicated in the table 
of numerical data. It is well also to include date and lot num- 
ber on commercial samples since there may be variations in 
composition and purity from time to time. In using Hercules 
samples the standard designation of notebook and page num- 
ber, as X1201-21, is used. When materials sold under trade 
names are used, the writer should give the company manu- 



factoring or selling the product and its specific composition, 
if known, or its general chemical characterization. 

Apparatus. Apparatus should be described in sufficient 
detail to enable another chemist to set it up and operate it 
again years later. Standard apparatus need only be named; 
special apparatus may be described, sketched, or photographed 
as necessary. Such details as dimensions and materials are 
necessary in descriptions of special apparatus. If purchased, 
the name and address of the manufacturer should be given. 

Methods. Methods should not be written up in detail when 
they are standard; a reference to the standard method is suffi- 
cient. The writer must, however, be sure that he is following 
such a method exactly. Any modification in the method must 
be fully described, and care should be taken to indicate when, 
in the course of a series of experiments, such a change is intro- 
duced. Credit should be given for the source of the methods 
when they are taken from the printed literature or company 
records. All conditions of the experiment should be included, 
such as temperatures, pressures, time, concentrations of solu- 
tions, order of mixing the ingredients, method of working up 
or purifying the crude product, quality of the product (ex- 
pressed as melting point or boiling range), and notebook 
references to each experiment. Yields and conversions should 
be expressed according to instructions given under Yield 
Terminology, pp. 237-239. Instead of writing up each run sep- 
arately, it is often better to describe the general procedure 
followed and to record the numerical data and variations from 
the general procedure in tabular form. Tables may be supple- 
mented by graphs. 

Analyses and Tests. Analytical results can usually be in- 
cluded in the tables of numerical data derived from various 
experiments. Investigations in which new analytical methods 
are worked out require a detailed account of the procedure. 
A good order to follow in describing analytical methods is: 
introduction, concise summary of the method, reagents, appa- 
ratus, procedure, calculations (including formula for calculat- 
ing results and limits of accuracy), references. 



Tables, Graphs, Photographs, and Drawings. Tables, 
graphs, photographs, and drawings should be substituted for 
long written descriptions when they save time and facilitate 
understanding. Care should be taken to prevent them from 
becoming so complicated that they defeat their purpose. (See 
pp. 240-245.) 


Each opening report, progress report, and closing report 
issued at the Experiment Station and at the plants is preceded 

by a digest of the report. In addi- 
tion, the digests are typed sepa- 
rately and circulated to execu- 
tives and certain other employes. 
Their purpose is to keep those 
people informed who do not 
have time to read the whole re- 
port and also to assist in locating 
information. For this reason, 
compactness and clarity are es- 
sential. They should be under- 
standable to persons not ac- 
quainted with the technical 
aspects of the investigation. 
Since the whole report is not always circulated with the 
digest, it is essential that the digest tell a complete story. 
The digest should include: 

1. An introduction, which correlates the present report with 
previous reports. 

2. An informational abstract of the present report. 

3. A statement of any patent action that has been taken. 

4. An outline of work planned for the future. 

The introduction should be brief and should clearly differ- 
entiate between past and present work. A digest of an opening 
report should include a statement such as "This is the first 



report under this investigation, which was authorized July 21, 
1944." Some reports on general investigations may have no 
past or future work to refer to, in which instance Part 1 in- 
troduces the present work and Part 4 is omitted. 

The abstract, which is Part 2 of the digest, is clearly outlined 
by Dr. E. J. Crane, Editor of Chemical Abstracts, in an article 
in which he describes the material 
that should be included in an in- 
formational abstract. 1 

He states that abstracts should 
be informational, complete, rea- 
sonably brief, accurate, and clear. 
Informational abstracts give the 
more important results and con- 
clusions of a study, accompanied 
by data and figures wherever de- 
sirable. Descriptive abstracts give 
merely the scope of the work, without indicating results ob- 
tained. Good abstracts are usually a mixture of the two- -in- 
formational for the more important results, descriptive as to 
methods used and other less essential information. There is a 
tendency to include too many merely descriptive statements 
in abstracts. By way of illustration, two abstracts of this 
booklet follow: 

Report Writing. Technical reports are discussed as to 
their purpose, their organization and basic form, and their 
content. The outline should follow that of Introduction, 
Procedure and Results, Conclusions and Recommendations, 
and Experimental. A description of digests is given and the 
different types of company reports with the special features 
and purposes of each are explained. Examples of the various 
reports are included. 

Report Writing. A discussion of how to write reports. 
An order for arranging material in a report is suggested. 
Special company reports are described. 
1 Crane, E. J., Ind. Eng. Chem., News Ed. 16, 353 d93 8 )- 



Obviously the first is better because it is more informational. 
The second is purely descriptive. 

The abstract section of the digest is followed by a mention 
of the patent status of each worthwhile item. This need be 
done only in a very brief manner. Short sentences which fre- 
quently appear in reports are: " 'Record of Invention' letter 
has been written"; "Active consideration is being given to 
patenting this matter, and a decision will be reached shortly"; 
" 'Disclosure of Invention' letter has been written"; "Patent 
is being filed." 2 If no reference is made to the patent situation, 
it will be assumed that no patent action is to be taken. 

A digest must be kept short in spite of the fact that the 
shorter it is, the more difficult it is to write. It has been our 
experience that in the majority of cases the digest need not 
exceed more than one page of single-spaced typing. The way 
to keep the digest short, however, is not by the use of abbre- 
viations which would be unacceptable in the report itself. 

It must be remembered that the digest and the report that 
follows are two separate units. Some people will read the digest 
without reading the whole report, while others interested in 
detail may read the report without reading the digest. For this 
reason, each should be complete in itself. Everything included 
in the digest must appear again in the report. 

The digests, instead of the complete report, are also the basis 
for indexing work, so care should be taken to include all im- 
portant facts. If anything really significant is omitted, it will 
not be indexed and may be "lost" to future workers. Putting 
all of the important information, e.g., a list of a hundred mate- 
rials tested, into a digest may often make it too long. In this 
case, a list of these compounds should be attached to the digest 
so that they will be indexed even though they are not included 
in the digest itself. 

Company policy in the matter of personal references is as 

2 Information on these letters and directions for writing them should be 
obtained from "Description of Invention for the Patent Department," mimeo- 
graphed copies of which can be obtained from the Report File Room at the 
Experiment Station. 



follows: The writer should not use the name of company 
chemists in the digest when referring to work done or to 
suggestions made by them. Credit may be given to these people 
in the text of the report, but in the digest references should 
be kept impersonal. For example, "Work done under RI 2027 
showed . . ." is preferred to "Mr. D. E. Blank's work done 
under RI 2027 showed that ..." 

Two examples of digests are given in the Appendix, Ex- 
amples IV and V, pp. 266-269. 


Several types of reports are issued at the Experiment Station 
and at the plant research laboratories. Though all of them fol- 
low the same basic outline, there are specific differences among 
them which ought to be observed. The types are: Reports 
under Investigations (RI Reports) , Technical Service Reports, 
Formal Reports (R2 Series), and reports on work done away 
from the home laboratory of the author. 


The four main types of reports written under investigations 
are as follows. 

Opening Reports 

An opening report is merely the first report on a new prob- 
lem. It usually has a long introduction and should include first 
a statement such as, "This is the first report under this investi- 
gation, which was authorized November 19, 1941." Next, the 
problem and work planned under the investigation as a whole 
should be discussed. In the discussion should be incorporated 
the material taken from the three sections of "Request for 
Specific Investigation Sheet" entitled: (1) Objective, (2) Out- 
line of Work, (3) General Information. This material usually 
needs to be reworded and expanded to give the reader more 



background. It is best to assume that the reader knows nothing 
about the subject, and to summarize briefly present-day in- 
dustrial practice in the field relating to the problem. 

When a new investigation is a continuation of work done 
under earlier investigations, this should be stated. If the earlier 
investigation was a general one covering a variety of problems, 
the dates and pages of the pertinent earlier reports should also 
be given. 

Finally, the current phase of the investigation is discussed 
and the work done to date is dealt with as in a progress report. 

An example of an opening report is given in the Appendix, 
Example I, pp. 252 ff. 

Progress Reports 

Progress reports are reports which are issued periodically 
during the course of an investigation in order to record the 
work accomplished since the last report. Many investigations 
last over a period of years, but should be reported upon at 
regular intervals. Progress reports are usually written every 
month except in cases where a subject has been relatively in- 
active. Then less frequent reporting is acceptable. In addition, 
even on active subjects it may be quite satisfactory at times 
to write a report every other month, or quarterly. In no case, 
however, may reports on an active subject be spaced more than 
three months apart. 

The outline given on pp. 218-223 should be followed in or- 
ganizing and writing a progress report. The Introduction must 
relate the current work to the past work in order to indicate 
the present status of the problem. Likewise, since many prog- 
ress reports leave an investigation in an unfinished state, it is 
necessary to include some indication of what work is planned 
for the future. The place to do this is in the Conclusions and 
Recommendations section. 

Numerous short reports are written each month which are 
complete in themselves with no related previous work and no 
future research to be done. Service Reports, described later, 
are examples of these short reports. In such cases, the Intro- 



duction should merely state the objectives, and the Conclu- 
sions and Recommendations section should contain a statement 
that no further work is planned. 

The title of an investigation is usually a sufficient title for 
the progress report except in the case of a general investiga- 
tion which covers a variety of subjects. Then a subtitle is 
needed and is included below the main title. For example, RI 
91 14 has as its title, "Analytical Methods and Apparatus- 
General," and a specific report must have a subtitle, e.g., 
"Determination of Unsaturation in Terpenes." 

When two or more problems under the same investigation 
are to be reported by one author, they may be written as two 
or more separate reports or as parts of one report, whichever 
method seems feasible. In a case where two or more chemists 
are working on the same problem under the same investigation, 
one report with joint authors should be written. 

Service Reports 

The description of each service job should be treated as a 
separate, complete report. As such it should follow the same 
general outline for writing reports as given earlier on pp. 
218-223. It will usually be short, but, in spite of that, it 
will have essentially all the features of other reports. It is 
recommended that if more than one service job is reported in 
one progress report, each should be treated as a separate unit, 
preceded by a suitable subtitle, such as the company name. 
See Example III in the Appendix, page 264. 

Development work often necessitates cooperative work 
with other companies, either in our own laboratories or at 
their plants. The experimental details of such work should be 
included in a progress report if there is an RI account to cover 
the work. The sales aspects of the contact should be written 
up as a Trade Report (p. 231). 

Closing Reports 

A closing report summarizes work reported under a number 
of progress reports of the same investigation. It should follow 



the outline on pp. 218-223, omitting the Experimental Section 
proper, since no new work should be reported, and end with 
the statement, "This investigation is closed." 

If the closing report is so short that it occupies only one 
typed page, it is not necessary to write a digest. In that case 
the short closing report will be treated as a digest. A separate 
digest, however, may be written if desired. 

The closing report should begin with a statement giving the 
date on which the investigation was authorized, then a brief 
sketch of the background of the problem, a statement of the 
problem, and reasons for doing the work. This should be fol- 
lowed by a concise description of the work that was done, the 
results obtained, the conclusions drawn, the patent situation, 
and recommendations for future work, if any. It will be found 
helpful if the description of the work done is accompanied by 
references to specific progress reports or letters. Then the 
closing report can be used as a guide to the desired progress 
reports and correspondence. The accepted form for referring 
to these reports is as follows: 

RI 9040, May 10, 1934, p. 2333. 
For incoming letters, the proper form is: 

D. E. Blank, C52-20-1/41231, dated 2/16/38. 

A closing report must be written for every investigation 
which has had one or more progress reports. 



If, at the time an investigation is closed, there are still un- 
reported data to record, these should be incorporated in a 
separate progress report and not in the closing report. The 
closing report should contain no new information. However, * 
when an entire investigation is written up at the time the 
investigation is closed, it should be a complete report. No 
additional closing report is needed. The statement, "This in- 
vestigation is closed" placed at the end of the report, is suffi- 
cient. . 

Investigations on which no technical information has been 
developed need no closing report. If it is necessary to explain 
why no work was done and no reports were written, the 
explanation should be typed in the space provided at the 
bottom of the Closing Notice Sheet under "Remarks." 

An example of a closing report is given in the Appendix, 
Example II, pp. 261-263. 


When customer contacts are made by members of the Re- 
search organization, they should be reported in a Trade Report 
(Technical Service Report) or by letter. Such reports are 
used to submit information which has a direct relation to the 
sale of our products. In general, these reports should be made 
on the proper forms provided by the specific operating depart- 
ment involved and should follow the special rules that depart- 
ment has set up for such reports. 

In the Appendix, Example VI (p. 269), there is a sample of 
the kind of information which should be included in any such 
report, regardless of what special forms are provided for the 
arrangement of the material. 

At the head of the report should be listed the name and 
address of the company and the names of the men contacted 
with their position in the organization, if known, 

In all cases, the introduction of the report should include 
the type of goods the company manufactures, the way in 
which the contact with the company was established, and the 



reason for the visit. If more than one report is required for 
the same problem, the first two items need not be repeated 
after the first report, but only the reason for the visit. 

The major portion of the report should consist of a sum- 
mary of the discussion that took place. This usually concerns 
the use of one of our materials in the customer's manufactured 
products. If possible, the estimated normal consumption figure 
should be obtained from the customer and shown in the report. 
If a patentable suggestion is made during the discussion, this 
should be included in the report, with a clear statement as to 
who made it. The exact status of the problem at the conclusion 
of the discussion should be given, with a statement as to 
whether it should be dropped or followed up, and, if it is to 
be followed up, what testing work we are to do, what samples 
we are to send, and what the customer is to do. 

Usually the subject matter of a Trade Report is of major 
interest to one department in the Home Office. This depart- 
ment should receive a copy of the report. In instances where 
a report contains an item of interest to a second operating 
department, another copy should be sent to the second depart- 
ment. One copy of each report should be sent to the Research 


There are at least four occasions when formal reports are 
written within the company, usually at the request of the 
Group Leader or Director of Research. These are: ( i ) When 
it is desired to provide a complete, organized account of work 
done under an extensive investigation, previously reported 
only by means of numerous progress reports. (2) When it is 
desired to assemble a comprehensive account of work reported 
under a number of investigations. For example, R2.543 sum- 
marizes the work done on Petrex * resins under RIs 4027, 4079, 
4099, 41 1 1, 41 1 3, and 412 1. The value of this type of report 

* Reg. U.S. Patent Office by Hercules Powder Company. 



lies in the subsequent saving of time to chemists who need 
to obtain a background in a particular field. Types (i) and 
(2) are sometimes called Final Reports. (3) When it is desired 
to assemble a comprehensive account of work on an uncom- 
pleted project in order to provide a basis for a discussion of 
its future. One of the commonest decisions to be made is 
whether more funds should be provided for continuation of 
the project. (4) When it seems likely that a unit of work, 


specific in nature but charged to a general investigation, would 
be hard to locate or difficult to use if written as a progress 
report under the investigation. For example, the collecting of 
spectrophotometric color data on rosin was charged to RI 
4200, "Rosin and Related Established Products— Manufacture 
and Use," but was written up as a formal report, R2.572, 
"Preliminary Study of the Fundamental Color Attributes of 

To insure uniformity, all formal reports are typed under 
the supervision of the person in charge of the Stenographic 
Section. They should be approved by the Group Leader or 
Assistant Group Leader and submitted to the Stenographic 
Section for checking before being typed. The number of 
copies of the report desired and the distribution of these copies 
should be included with the rough draft of the report. 




The Testing Group at the Experiment Station writes test- 
ing reports in order that the results of test work may be im- 
mediately reported to the interested persons instead of waiting 
until a specific progress report period. The outline of a testing 
report should follow the basic pattern given on pp. 218-223. 
The Introduction may be only a sentence or two stating the 
problem or objective of the tests, and there may or may not be 
Conclusions and Recommendations to make, but the Procedure 
and Experiment Sections should always be complete. All test- 
ing work except routine tests should also be reported as RI 
progress reports. 

Some operating groups at the Experiment Station request 
that a summary be included with the testing report. This 
should be written according to instructions given for digests 
on pp. 224-227. When the testing report is converted into a 
progress report, the summary may then be used as the digest 
of the report. 

An example of a testing report is given in Example VII in 
the Appendix, pp. 271-273. 


By Company Employes 

Occasionally a person from the Home Office, Experiment 
Station, or plant must go to another Hercules plant or to an 
outside company in order to carry out some experimental 
work or to aid in new developments. The Patent Department 
has drawn up the following procedures to be followed in 
reporting this work. 

If possible, the author should have the proper number of 
copies of the report typed on regular report paper with a 
heading showing the place and the laboratory or plant in 
which the work was done and the date. He should sign and 
dgte it and send it to his. home laboratory or office. 



In cases where such a procedure is impractical, he should 
forward his handwritten report, signed and dated, to his home 
laboratory where it can be reported by a chemist thoroughly 
familiar with the work. This chemist should sign the report 
as his own but should enclose the original report in quotation 
marks and explain fully where and by whom the work was 
done and where the original report is filed. 

In cases where work is done at one laboratory under an 
investigation assigned to another laboratory, the report should 
be typed and all copies forwarded to the proper laboratory 
to be issued from there with their regular monthly progress 
reports. For example, a chemist at the Experiment 
Station under a Kenvil investigation should have his report 
typed at the Experiment Station, sign and date it, then forward 
all copies to Kenvil for inclusion in the Kenvil reports and 
for distribution with them. 

By Fellows, Consultants, and Testing Laboratories 

The Experiment Station Library is the central depository 
for reports by fellows, consultants, and testing laboratories. 
Three copies of each report on work done outside the com- 
pany should be forwarded to the Librarian. The last page 
of each copy should be signed by the author, countersigned, 
and the signatures dated. One copy of the report is kept in 
the Experiment Station Library File. The proper Group 
Leader is notified and is responsible for having the report 
included in an RI progress report. The chemist who tran- 
scribes the report may incorporate it word for word in quo- 
tation marks or he may summarize and amplify it in his own 
words. In either case he should give the file number and author 
of the original report and the place where the work was done. 


The information and suggestions which follow are given 
to help the chemist with the mechanical details of report writ- 
ing. For the preferred style and spelling of some classes of 



words and the form of certain of the more common chemical 
formulas, the chemist should consult the booklet, "Word List, 
Abbreviations, and Chemical Symbols and Formulas," M. W. 
Grafflin, issued by the Research Department, September, 1943, 
and Supplements issued since that date. 


Chemical Terms. Chemical formulas may be used for ele- 
ments and simple inorganic compounds. Most organic chemi- 
cals are better described by name; in many cases, it may be 
desirable to place the formula in parentheses immediately 
following the name. The Central Index in the Experiment 
Station Library may prove helpful when there is doubt about 
the name of a chemical compound. The subject headings there 
have been chosen carefully with the assistance of the authori- 
ties in the particular fields covered. 

Trade Names. When trade names are used, they should be 
given accurately, accompanied by the chemical name or com- 
position as far as known, and also by the complete name of 
the manufacturer or supplier. The Trade Name File in the 
Central Index at the Experiment Station contains information 
of this sort, and may be consulted. Lot number and date of 
all commercial samples should be given. 

Vernacular Terms. Vernacular terms frequently come into 
use in industrial plants. The natural tendency to carry these 
words over into scientific writing should be avoided. They 
should be considered critically and discarded if a more scien- 
tifically accurate word is available. For example, the chemicals 
sodium hydroxide, sodium bicarbonate, sodium carbonate, 
sodium oxide, and sodium nitrate should always be written 
out instead of calling them by the indefinite term soda. The 
chemical names benzene, toluene, and xylene should be used 
and not the commercial names benzol, toluol, and xylol. Nitro- 
cellulose should be used in place of the older terms guncotton 
and nitrocotton. 



Yield Terminology. In the interpretation of yield data, the 
terms conversion, per cent reacted, yield, and productivity 
should be employed as defined here. 

Conversion: Quantity of product obtained expressed as per- 
centage of theoretical quantity expected. 

Per Cent Reacted: Quantity of reactant 
consumed expressed as percentage of 
reactant present. 

Yield: Quantity of product obtained 
expressed as percentage of the product 
equivalent to reactant consumed. 

Productivity : Quantity of product ob- 
tained expressed as amount of product 
per unit amount of reactant supplied. 

These definitions apply to batch re- choose wouds carefullv . 
action data and to single-pass data from 

continuous operations. In reporting data, any deviations from 
the above conventions should be accompanied by a complete 
definition of the method of calculation employed. 3 Most of 
the confusion due to the use of different terms and methods 
of calculation will be avoided if these conventions are followed 
strictly. The following examples illustrate the use of these 
terms and the method for calculating their values. 

r, For the preparation of methyl benzyl ketone with thorium 
oxide as catalyst, 4 136 g. (1 mole) phenylacetic acid and 
120 g. glacial acetic acid were reacted to form 80 g. methyl 
benzyl ketone (mol. wt. 134) and a mixture of products 
from which 4 g. phenylacetic acid and 18 g. dibenzyl ketone 
were isolated. 

3 For instance, in Example I, p. 258, productivity is calculated on the basis 
of volume instead of weight, and this is clearly shown both in the text and 
in the table. 

4 Herbst, R. M., and Manske, R. H., "Organic Syntheses," Collective Vol. 
II, 1943, p. 389, Wiley, New York. 



Conversion of phenylacetic acid: 
actual yield (= 80) 

theoretical yield (= 134) X 100 = ^^-7% 

Per cent phenylacetic acid reacted: 
136 — 4 

-^Xioo = 97 % 

Yield (based on phenylacetic acid) : 


theoretical yield from (136-4) (=130.5) X IOO = 6l -3% 



— = 0.59 g. methyl benzyl ketone per g. phenylacetic acid 

One mole (60 g.) acetic acid and 1 mole (46 g.) ethanol 
were reacted together under mild conditions with a small 
amount of sulfuric acid as catalyst. When the reaction 
ceased, the catalyst was destroyed, and the two reactants 
and ethyl acetate (mol. wt. 88) were distilled from the 
mixture. Twenty grams acetic acid, 16.1 g. ethanol, and 
58 g. ethyl acetate were found. 


-gx 100 = 65.9% 

Per cent acid reacted: 
60 — 20 

— — X 100 = 66% 

Yield based on acid: 


theoretical yield from (60 - 20) (= 57.2) X 100 ~~ "'^ 



— = 0.96 g. ethyl acetate per g. acetic acid 



Fifty pounds hydrogen sulfide was added to 150 lb. pinene 
with 100 lb. 85% phosphoric acid as catalyst, according 
to a method covered by Hercules' U. S. Patent 2,076,875 
(1937). Twenty-eight pounds unreacted pinene was re- 
covered, and 140 lb. terpene mercaptan was obtained from 
the product. The reaction is as follows: 

C 10 H 16 + H 2 S — > C 10 H 1? SH 

136 34 l l° 


actual yield (= 140) X 100 = 747% 

theoretical yield (= 187.5) 

Per cent reacted: 

J * Q - 28 X -00 = 81.3% 



theoretical yield from (150 — 28)(=i52.5> 

= 0.93 lb. mercaptan per lb. pinene 

- x 100 = 91.7% 


Abbreviations may be used for common units, but it is not 
advisable to use abbreviations in the text of a report or in the 
digest unless they are accompanied by figures, for example, 
10 g., 25 cc. or 25 ml, 75°C. 

The proper abbreviations should be used in place of sym- 
bols, such as the following, which have more than one mean- 

ft. or min., not ' 
in. or sec, not " 
no. or lb., not # 



In giving temperatures always follow the number and 
degree sign by F., Q, R., or K. to indicate the scale used. 

When two numbers occur next to each other, one express- 
ing quantity and the other expressing size, one of the numbers, 
preferably the first, should be written as a word instead of as 
a number to avoid possible ambiguity; thus, two 50-cc. 

A complete list of abbreviations and symbols with accom- 
panying notes is given in "Word List, Abbreviations, and 
Chemical Symbols and Formulas," M. W. Grafflin, issued 
by the Research Department, September, 1943, and its Supple- 


Tables. The purposes of tabulation are to enable the chemist 
to discover relationships which may not be noticeable in un- 
classified data and to facilitate the presentation of facts. Thus 
tabulation is both a logical way of analyzing data and a sum- 
mary of such an analysis. 

There are two main types of tables. The general-purpose 
table presents a comprehensive set of data in a clear, concise 
arrangement to enable the reader to locate any particular 
item. The special-purpose table presents a selected set of data 
in such an arrangement that it throws significant relationships 
into relief. 

The title of a table should be chosen so as to name precisely 
the contents of the table. It should aid the reader in under- 
standing the facts in the table. "Table 1" is not a sufficient 
title. All columns and rows should have clear, concise head- 
ings. "Column 2" and "Row 3" are inadequate headings. 

Footnotes are used to indicate special characteristics or 
limitations of part or all of the data, to define terms not used 
in the generally accepted sense, or to give any special facts 
limiting the significance of particular items. Footnote indica- 
tions should be a symbol or letter of the alphabet; a number 



should never be used, since it may be interpreted as one of the 
numerical data. 

The general title, subtitles, and column headings should 
all be chosen in such a manner as to make the table a self- 
contained presentation of information. It should be assumed 
that the reader of the report should be 
able to remove the table from a report 
and still know what it is all about. 

Tables are typed if it is possible to 
record all data on a single page. Large 
tables can be reduced in size by photo- 
graphing, but they should not be so 
large that photographic reduction 
would make them difficult to read. Often it is better to "divide 
a table into two or more parts. In deciding whether all the 
experimental data should go into one table or more than one, 
the following considerations suggested by Walker and Durost 5 
may be of help: 

Separate problems demand separate tables. 

All the data which need to be considered at one time should 

be put into one table. 

Irrelevant facts which are not related to the central idea 
result in confusion, loss of emphasis, and an impression 
of hasty and careless preparation. 

A general-purpose table should not be broken up into 
separate small tables which would force the reader to gather 
one fact from one table and another related item from 
another table. 

If several forms of a table are possible, the most effective 
one often can be selected by sketching all the possibilities and 
choosing the form which presents the data in the clearest 
manner. Often an exchange of rows and columns greatly 
improves a table. 

5 Walker, H. M., and Durost, W. N., "Statistical Tables. Their Structure 
and Use," 1936, p. 70, Columbia University, New York. 



After the table is organized, it should be checked to see 
that it meets the following criteria: 6 

Is it logically a unit, all the data closely related, with no 
extraneous facts included? 

Is it autonomous, self-explanatory, self-sufficing? Can it 
stand alone if removed from the context? 

Is the title unambiguous, concise, complete, clear, and 
logically accurate? 

Are sources and units specified? 

Does every column and every row have a heading? Are 
these well chosen? Does the column heading, taken with 
any box headings to which it is subordinate, name that 
which stands in the column? 

Are all subclassifications logically subordinate to the main 

Does the arrangement facilitate logical analysis? 

Graphs. Valuable as tabular arrangements may be, graphic 
presentation is often more effective. The function of a graph 
is to present a picture which can be understood at a glance. 
The most common type of graph is the line graph, which 
shows geometrically the relation between two or more vari- 

Graph papers with many kinds of grids are available in the 
storeroom, and the author should become familiar with the 
advantages and disadvantages of each so that he can use the one 
which will tell his story most effectively. Frequently, for ex- 
ample, semilogarithmic paper will give a much clearer picture 
of the data than a simple numerical grid. In ordinary cases, 
where only one set of scales is used, the coordinates should be 
on the left-hand side and at the bottom. The vertical axis is 
used for the function (the dependent variable) and the hori- 
zontal axis for the independent variable, e. g., time in hours. 

6 Ibid., p. 7?, 



Scale captions for both axes and units of both should be clearly- 
stated, for instance, "Esterification Time in Hours" and "Con- 
centration of Acid in Moles." Do not use mathematical sym- 
bols without an explanation. As an example, do not label one 
coordinate "°G," but "Temperature, °C." 

Where two or more curves are plotted on one graph, care 
should be taken to distinguish them by a clearly explained 
code. But too many curves should not be placed on one sheet, 
for then their purpose, which is to give a quick grasp of data 
and relationships, is defeated. Moreover, since the slope of a 
curve is what the reader notes, the curve should be drawn to 
give an honest picture of conditions. This can be done only 
by keeping in mind the limits of experi- 
mental accuracy of the data. The mathe- 
matics of the relationship between variables 
should be studied so that it can be presented 
in a proper graphical form. Graphs should 
not be plotted unless there are sufficient sig- 
nificant data; so-called "three-point graphs" 
should be regarded with suspicion. Since 
there may be several ways of drawing a 
curve between experimental points, attention should be given 
to the conditions which must be met before one set of values 
can be assumed to define only one curve. For information on 
these conditions, Deming's "Statistical Adjustment of Data" 
(1943, Wiley, New York) should be consulted. 

The Photographic Group of the Experiment Station is 
equipped to produce finished graphs and charts starting with 
rough drafts submitted to them by the chemist, although in 
rare cases it may be desirable for the chemist to prepare his 
own. In any event, the chemist should obtain graph paper 
from the storeroom. The Photographic Group should be con- 
sulted when special effects are desired. In choosing paper, it 
should be remembered that orange lines photograph black and 
are shown in the print, while blue lines normally do not repro- 
duce well and will not appear in the finished print. If the 
chemist finishes his own graph, a good grade of black ink 



should be used when drawing the curves; if he submits a 
rough draft to the Photographic Group for the final copy to 
be made, he must use a soft lead pencil which can be easily 
erased; ink or colored or indelible pencil must not be used 
in preparing this material. The material must be drawn up 
in such a way that inking or lettering by the draftsmen will 
put it in final form for photographing or photostating. 

If more than one line appears on a graph, keys must be 
used to identify them. When an area rather than a curve or 
point is shown, state this clearly. If points or curves from 
someone else's work are included, indicate this by a suitable 
key and state the source. Any accompanying data should be 
placed in the lower right-hand corner. On the draft submitted 
to the Photographic Group for finishing, a considerable 
amount of time can be saved and greater uniformity will result 
if keys, titles, scales, dates, RI numbers, and the chemist's 
name are typed on the graph paper. When typing, this mate- 
rial should be backed by a sheet of carbon paper against the 
reverse side of the graph paper. Legends should be typed on 
a graph in the lower right-hand corner even though the curve 
is drawn in pencil to be inked in and printed by the Photo- 
graphic Group. 

Photographs. The arrangement of apparatus and samples 
for photographing is primarily the responsibility of the Photo- 
graphic Group at the Experiment Sta- 
tion, but the author of the report should 
consult with the Photographic Group 
in deciding what can be best presented 
in this way. Often, for instance, a dia- 
gram of the apparatus may be prefer- 
able to a photograph; if in doubt, 
the chemist should ask for the advice 
of the Photographic Group on this 

Drawings. A drawing of apparatus or a flow sheet may 
often contribute materially to improving the clarity of a re- 
port. If apparatus is shown in such a drawing, all parts should 



be clearly numbered to correspond to the description in the 
text. In general, the chemist should follow the same instruc- 
tions in preparing preliminary draw- 
ings as in preparing graphs so that the 
Photographic Group at the Experi- 
ment Station can put them in final 
form in a minimum time. In making 
the preliminary drafts, the chemist 

will often profit by discussing the arrangement with the drafts- 
men of the Photographic Group. 


If a literature survey or bibliography has been made in con- 
nection with the work reported, this fact should be mentioned, 
and the file number of the bibliography or survey should be 
stated. In this case, only the papers most closely related to the 
work at hand need to be listed and discussed. 

The following forms should be followed' in all citations to 
the literature: 

Periodicals. In giving periodical references the name of the 
author should be given first, and then the name of the periodi- 
cal in the form followed by Chemical Abstracts. A selected 
list of the most important technical journals, their proper 
abbreviated titles, and additional information on changes in 
names and subtitles of sections are given in the revised edition 
of the booklet "Suggestions to Hercules Authors of Technical 
Papers," M. W. Grafflin and L. W. Beck, issued by the Re- 
search Department, May, 1944. A complete list of the abbre- 
viations can be found printed in bold-faced type in Chemical 
Abstracts 30, following p. 8692 (1936) and in the Supplement 
issued in 1942. Reprints of these lists are available in the 
libraries at the Experiment Station and plants. 

Following the title of the periodical come the volume num- 
ber (underscored in typescript copy, bold-faced type in 
print), the inclusive page numbers, and the year of publication 
in parentheses. An example follows: 



Pickett, O. A., and Schantz, J. M., Ind. Eng. Chem. 26, 707-710 

Sutherland, B. P., Can. Chem. Process Ind. 28, 812-815, 821 

Some journals, instead of issuing volumes with continuous 
numbers, issue only a certain number of volumes and then 
start over again with Volume I. These groups are known as 
"series"; when referring to these journals, it is necessary to 
give the series number. Xhis is inserted in brackets or paren- 
theses between the name of the journal and the volume num- 
ber, as: 

Dode, M., Bull. soc. chim. (5), 5, 64-69 (1938). 

Other journals, instead of using continuous pagination 
throughout each volume, begin each issue with p. 1 . In such 
cases, it is necessary to give the issue number. This is inserted 
between the volume number and the page number, and is 
preceded by "No." Thus, 

Stark, R. C, Paint,' Oil Chem. Rev. 107, No. 12, 10-11 (1944). 

Certain journals do not have volume numbers, e. g., Journal 
of the Chemical Society and Chemisches Zentralblatt. The 
latter is further divided into Part I and II for each year. For 
these journals, the year should be given in the place where 
the volume numbers would otherwise appear. 

Iredale, T., and Lyons, L. E., J. Chem. Soc. 1944, 588-590. 
Bassett, H. N., Chem. Zentr. 1937, 1, 1493. 

Books. References to books, pamphlets, and other single 
publications should be written in the following order: last 
name of author, his initials, title enclosed in quotation marks, 
edition, volume number, date of publication, page number, 
publisher, and place of publication. 

Baly, E. C. C, "Spectroscopy," 3d ed., Vol. 3, 1927, p. 100, 
Longmans, London. 



Theses. References to theses should give author, title, the 
word "thesis," place of publication, and date of publication. 

Wahlig, W., "A Study of the Acetylation of Cellulose," Thesis, 
Darmstadt, 1930. 

Correspondence. References to letters should show the file 
number, that is, the number marked in the upper right-hand 
corner of the letter, the date, and the author. The serial num- 
ber, which is stamped on all incoming letters at the Experiment 
Station, should be shown in conjunction with the file number, 
but not in place of it. That is because 
the serial numbers have been repeated 
each year. Often it is desirable to in- 
clude the subject of the letter in a 
reference. It is well to remember that 
at the Experiment Station letters are 
filed by subject and coded in number, 
while at the Home Office letters are 
filed by company and author names 
and coded in number. Thus, a letter wj?/t€ L€6/BLY 
written by John Doe at the Experiment 

Station on February 16, 1938, with a file number of 52-20-1 
should be given as J. Doe, C52-20-1 dated 2/16/38. (The C 
stands for correspondence.) The serial number also should be 
given in citing an incoming letter. Thus: R. Roe, C52-20- 
1/41231 dated 2/16/38. 

Reports. References to progress reports should give the 
report number, the date, and the page or pages on which the 
information is found. Thus: RI 9040, May 10, 1934, p. 2333. 
In referring to Trade Reports, the name of the company or 
person contacted, author, and date of the report should be 
given. In referring to formal reports and other special reports, 
it will usually be sufficient to give merely the report number, 
but the date and the page number may be included when 

Patents. Patent references should include the name of the 
country in which the invention is patented, the patent number, 



and the year of issue. The year of application must also be 
given in references to British Patents issued prior to 19 16 or 
with serial numbers of less than six digits, because early British 
Patents were numbered serially each year. Thus, "The proc- 
ess is covered by U. S. Patent 1,708,787 and Brit. Patent 
7687/19 1 2." If the word "patent" has been used previously, 
it may be omitted in the references, e. g., "Two patents 
covering the process are U. S. 1,708,787 (1929) and Brit. 

Since the owner of a United States patent is often of as 
much significance to the reader as the number of the patent, 
it is usually best to give the assignee in addition to the num- 
ber. Thus, "The process is covered by Jelley and Wittum's 
U. S. Patent 2,322,027 (1943) assigned to Eastman Kodak 
Company" or "The process is covered by Eastman Kodak 
Company's patent U. S. 2,322,027 (1943)." 

When it is desired to give a complete patent reference con- 
taining information about assignee, patentee, etc., it should be 
written as follows: "U. S. Patent 2,182,826, filed February 15, 
1936, issued December 12, 1939, to D. H. Sheffield, assigned 
to Hercules Powder Company, covers the process of preparing 
terpene ethers." 

The correct abbreviations for the name of the country 
issuing a patent, e. g., Ger. for German patents, can be found 
in Supplement No. 2 of the Word List booklet. 


Observance of the following rules will help the typist who 
has to convert the report from the manuscript to its final form. 

Write with a moderately hard pencil on ruled, unglazed 
paper. Soft pencilmarks smudge; hard pencilmarks cannot be 
seen under some conditions of illumination. 

Write inserts and long corrections on separate sheets of 
paper and place them in the manuscript behind the page to 
which they belong. Place short corrections, written directly 
on the manuscript, above rather than below the line to which 



they pertain; otherwise the typist may miss the correction. 
When correcting typed copy, do not encircle words or phrases 
or disfigure the sheet in such a way as to make erasing difficult 
or retyping of the whole sheet necessary. A check mark in 
the margin and light penciled directions will usually be suffi- 

The manuscript set up in the a Line-a-time" before the typist 
is some six inches farther from her eyes than when read nor- 
mally; therefore, a conscious effort should be made to avoid 
cramped writing. 

Be sure that all unfamiliar words and figures are written 
plainly, that a and o, m, n, and u are distinguishable, and also 
that there is a clear distinction between capital and small 
letters especially in equations, formulas, and diagrams. 

Spell correctly. Typing is a visual operation. Even though 
a typist knows how to spell, the misspelled word is copied as 
it appears before she realizes that it is misspelled. 

Tables are the most difficult part of a report to transcribe. 
There is no sequence of thought to help in deciphering an 
illegible word or figure. It is particularly important, therefore, 
to make the headings clear, to avoid unusual abbreviations, 
and to write the figures plainly. Use decimals instead of frac- 
tions wherever possible, because fractions do not show up 
clearly on carbon copies. • 


For filing purposes, each report at the Experiment Station 
is given a call number consisting of the letter R standing for 
report, and a number standing for the class of reports, followed 
by another number representing the investigation number or 
a number assigned consecutively in order of acquisition of the 

The RI reports are progress reports on work done under the 
Requests for Investigation at the Experiment Station and at 
many of the plants. The plant investigations are distinguished 
from the Experiment Station investigations by the full plant 



name or its abbreviation preceding the number, as Parlin, 
Kenvil, Mans, for Mansfield, Htbg. for Hattiesburg, etc. 

Formal reports are designated by R2 followed by a decimal 
point and a serial number. Thus R2.435 is the four hundred 
and thirty-fifth formal report added to the file. 

The Home Office and some of the plants issue reports that 
have no Request for Investigation number. These reports are 
classified as R3 plus a subdivision number denoting the place 
of issue. Thus R3:3 stands for Brunswick Plant reports, R3:4 
for Savannah, R3 : 1 3 for Home Office reports, etc. 

R4 designates Trade Reports (Technical Service Reports) . 

R6 designates reports by fellows, consultants, and testing 
laboratories. They may be in the form of letters and are usually 
incorporated also on RI progress reports (see p. 228). 

Testing Reports are classified as Rn plus letters denoting 
the type of test work. R11.A1 is for special tests, Rn.C for 
foundry work, Rn.H for spectrophotometric determinations, 

Further details on the classification and filing of reports at 
the Experiment Station can be found in the mimeographed 
publication, "The Experiment Station Library Filing System" 
( I 943) : 

Special instructions on writing, typing, and issuing Requests 
for Investigation are issued as "RI Instruction Bulletins" and 
should be consulted when questions arise. 


The books listed are available in the Experiment Station 


Anon., "Directions for Assistant Editors and Abstractors of Chem- 
ical Abstracts," 1939, American Chemical Society, Columbus, 

Anon., "The Preparation of Reports," 2d ed., rev., 1941, Hercules 
Experiment Station, Hercules Powder Company, Wilmington, 



Grafflin, M. W., "Word List, Abbreviations, and Chemical Sym- 
bols and Formulas," and Supplements, 1943, Research Depart- 
ment, Hercules Powder Company, Wilmington, Delaware. 

Grafflin, M. W., and Beck, L. W., "Suggestions to Hercules 
Authors of Technical Papers," rev. ed., 1944, Research Depart- 
ment, Hercules Powder Company, Wilmington, Delaware. 

Nelson, J. R., "Writing the Technical Report," 1940, McGraw 
Hill, New York. , 

Prescott, W., "How to Write Reports, Business, Engineering, and 
Architectural," 2d ed., rev., 1934, Cambridge, Massachusetts. 

Reid, E. E., "Introduction to Organic Research," 1924, pp. 313- 
30, Van Nostrand, New York. 

Rickard, T. A., "Technical Writing," 1923, Wiley, New York. 

Tanberg, A. P., "Formal Report Writing," mimeographed, 1919, 
E. I. du Pont de Nemours & Co., Wilmington, Delaware. 

References on tables and graphs: 

Arkin, H., and Colton, R. R., "Graphs. How to Make and Use 

Them," 2d ed., 1936, Harper and Brothers, New York. 
Baker, R. P., and Howell, A. C, "The Preparation of Reports," 

rev. ed., 1938, Chapter 7, Ronald Press Company, New York. 
Deming, W. E., "Statistical Adjustment of Data," 1943, Wiley, 

New York. . ^ ; 

Walker, H. M.,.and Durost, W. N., "Statistical Tables, Their 

Structure and Use," 1936, Columbia University, New York. 


The following examples are fictitious and are included for the purpose 
of illustration only. 


Wilmington, Delaware 
August 5, 19 — 

RI 0010 Smith - Nitroethane - Preparation by the 
Vapor-Phase Nitration of Ethane 


This investigation, which was authorized 
May 13, 19 — , is the outgrowth of promising work 
done under RI 0003. The object is to determine 
whether the vapor-phase nitration of ethane can 
be developed into an economical process for the 
production of nitroethane (C 2 H 5 N0 2 ) and, to a 
smaller extent, of nitromethane (CH 3 N0 2 ). These 
nitroparaff ins are of interest as raw materials 
for the synthesis of various explosive compounds 
such as nitroisobutyl glycol dinitrate and ni- 
troisobutylglycerol trinitrate. 

During the present period, studies were 
made on the type of reaction vessel and on the 
effect of temperature and ratio of reactants on 
the yield. As in the method used in RI 0003, a 
mixture of vapors formed by bubbling ethane 
through hot nitric acid is passed through a 
heated reaction tube. It was found advantageous 
to use a smaller reaction tube (10-35 cc.) than 
formerly (100-250 cc.) in order to shorten the 
time of contact and a higher temperature (400- 

2 5 2 



460°C. instead of 330-350°C). Yields of nitro- 
paraffin varied from about 14.0 to 31.5% based 
on the nitric acid used, the highest yields be- 
ing favored by rapid heating and short contact 
time. A nitric acid:ethane mole ratio of 1:9 
appeared to be the most favorable. 

It is proposed to build a new stainless- 
steel apparatus which will allow a wider range 
of reaction conditions for studying the effects 
of the different variables. 

This is the first report under this inves- 
tigation, which was authorized May 13, 19 

Its object is to determine whether a satis- 
factory process can be worked out for the 
preparation of nitroethane (C 2 H 5 N0 2 ) by the 
vapor-phase nitration of ethane. Proof of prac- 
ticability of the process must be obtained 
before a decision can be made as to whether fur- 
ther extensive studies should be undertaken on 
the synthesis of various substances from nitro- 

It has been shown that it is possible to 
prepare mononitroparaf f ins by the direct action 
of nitric acid vapor on gaseous hydrocarbons. 
(1, 2, 3) Nitromethane (CH 3 N0 2 ) is thus obtained 
from methane, nitromethane and nitroethane from 
ethane, and increasingly complex mixtures of 
nitroparaffins from the higher-molecular-weight 
paraffin hydrocarbons. It has long been known 
that upon condensation of nitromethane with for- 
maldehyde, nitroisobutylglycerol (N0 2 C(CH 2 0H) 3 ) 
is formed. (4) Nitroisobutylglycerol can, in 
turn, be nitrated to form a trinitrate which can 



be used in explosives. (5) Similarly, nitroethane 
and formaldehyde form nitroisobutyl glycol 
(N0 2 )(CH 3 )C(CH 2 0H) 2 (6) which can be nitrated to 
the dinitrate. (7) 

The nitration of ethane and propane have 
already been studied in a preliminary way under 
RI 0003.(8) The yield of the nitroethane, based 
on the nitric acid used, was increased from 9% 
to 33%. Investigation of the production of 
nitroisobutylglycerol and its nitration has al- 
ready been started under RI 0007. 

During the present report period, efforts 
were directed toward finding the size and shape 
of reaction vessel best adapted to the reac- 
tion, and the effect of temperature and ratio of 
reactants on the yield. Samples of ethane were 
nitrated in a modified form of glass apparatus 
described in RI 0003,(2) which provides for 
passing a hydrocarbon through hot nitric acid, 
and heating the gaseous mixture obtained in a 
tube surrounded by a boiling liquid bath. Evi- 
dence obtained under RI 0003 by running various 
nitrations in reaction tubes of different 
lengths and at different temperatures showed 
that high temperatures are necessary to make the 
reaction go, but that high temperatures also 
increase decomposition of the products. The 
type of reaction tube indicated by these results 
is one permitting a rapid passage of the reac- 
tants through a narrow hot zone. 

Consequently, the reaction tube was re- 
designed during the period covered by the 
present report to provide for a greater space 
velocity. Its volume was decreased from 100 cc. 
to 35 cc, and the diameter of the tubing in- 
increased from 5 mm. to 12 mm. Two runs were 
made in the apparatus, one in which the tube was 



packed with glass beads, and one in which there 
was no packing. Nitroethane was obtained only 
in the coil containing no packing, and then only 
in a small yield of 14%. The poor results with 
beads may have been due to poor transfer or to 
surface catalysis of undesired reactions. The 
new tube was modified further in such a way as 
to reduce the retention in the hot zone from 1 
sec. to 0.1 sec. This was accomplished by de- 
creasing the volume to 10 cc. and the diameter 
to 3 mm. Three runs were made in this appara- 
tus, at 400°, 460°, and 400°C, respectively. 
The last, which produced 0.34 cc. nitroparaf f in 
per cc. of nitric acid put in, as opposed to 
0.23 and 0.26 cc, respectively, for the first 
two runs, was the best under this investigation 
and indicated that a 1:9 mole ratio of nitric 
acid .-ethane was better than the 1:6 ratio used 
in the other two runs. The rate of production 
in this reaction coil was at least ten times 
that in any other coil used in this investiga- 
tion or RI 0003. Rates of 11-14 cc. of nitro- 
paraffin per hour were obtained in all three 
runs. Moderately high ratios of hydrogen to 
acid, exact temperature control, rapid heating, 
and short time of contact seem necessary for 
good results. These results are summarized in 
Table 1. 

Experiment Section 

The ethane used in these experiments was 
obtained in cylinders from Carbide and Carbon 
Chemicals Corporation. The acid used was 68% 

The glass apparatus was a modified form of 
the one diagrammed and described in detail under 
RI 0003.(2) It consists essentially of a nitric 



acid vaporizer, a reaction tube, and a conden- 
ser. Both the vaporizer and reaction tube are 
surrounded by constant-temperature baths. Boil- 
ing liquid was used to heat the nitric acid, and 
molten sodium nitrate to heat the reaction tube. 
Ethane is passed through the nitric acid at a 
controlled rate, thereby forming a gaseous mix- 
ture, the composition of which depends upon the 
temperature of the vaporizer bath and the rate 
of flow of ethane. The mixture is then passed 
through the reaction tube heated to a high tem- 
perature by means of the surrounding bath. The 
condensate consists mostly of nitroparaf f ins, 
water, and unused nitric acid. The nitroparaf - 
fins are easily separated from the condensate as 
an oily layer. A small additional quantity of 
nitroparaff in is obtained by distilling the 
aqueous layer until only water distills over. 

The productivity is expressed in terms of 
volume of nitroparaf fin produced per volume of 
68% nitric acid introduced, and yield in percen- 
tage of theoretical yield calculated as nitro- 
ethane (Table 1). It may be observed that 
theoretically 1 cc. of 68% nitric acid will pro- 
duce 1.14 g. or 1.08 cc. of nitroethane. The 
nitroethane, however, contains a small undeter- 
mined proportion of nitromethane. If this were 
taken into account, calculated yields would be 
slightly higher. 

The amount of nitric acid that is intro- 
duced is determined by measuring the decrease in 
volume that occurs in the graduated reservoir 
from which nitric acid is pumped to the vapor- 

Details of individual experiments are de- 
scribed below and the data concerning the runs 
are collected in Table 1. 



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Experiment 1 

This run was made in a reaction tube of 
larger diameter and smaller volume than that 
used in RI 0003. The tube, made of 12-mm. Pyrex 
tubing, was 35 cm. long and had a volume of 
35 cc. As illustrated in Figure 1, it was 
heated by means of a molten salt bath contained 
in a surrounding tube, which was heated in turn 
by an electric coil wound on the outside. The 
yield was low. 

Experiment 2 

In this experiment, the temperature of the 
bath was raised to 450°C, and the volume of the 
tube decreased to 20 cc. by packing it with 
glass beads. No nitroparaf f in was formed. 

The results obtained from Experiments 1 and 
2 suggest that the reacting substances cannot be 
heated rapidly and uniformly in a tube such as 
that used. 

Experiment 3 

This run was made in a reaction tube of 
smaller diameter and smaller volume than used 
heretofore. The tube, made of 3 -mm. Pyrex tub- 
ing, had a volume of 10 cc. As illustrated in 
Figure 2, it was made in the shape of a coil and 
was immersed in a molten salt bath. It was de- 
signed to reduce the time of contact in the hot 
zone, and to permit uniform heating to high 

The production rate per unit volume of re- 
action vessel is about ten times greater than 
that obtained heretofore, although the yield is 
less than the best value reported under RI 0003. 


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tfe&cuL£S /^otvoe/Z Company' 
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Experiment 4 

The same apparatus was used as in Experi- 
ment 3, but at a temperature of 460° C. instead 
of 400°C. The yield as shown in Table 1 was 
only slightly higher than that obtained in Ex- 
periment 3. Throughout the run, there was 
formed a dark brown substance which may be a de- 
composition product of the nitroparaf f ins. This 
indicates that either the time of contact was 
too long or the temperature too high. 

Experiment 5 

The same apparatus was used as in Experi- 
ment 3, and the same temperature, but the mole 
ratio of nitric acid:ethane was 1:9 instead of 

(1) Hass, H. B., Hodge, E. B., and Vanderbilt, 
B. M. , Ind. Eng. Chem. 28, 339 (1936). 

(2) Hodge, E. B. , "The Preparation and Properties 
of Certain Nitro-Paraf f ins , " Thesis, Purdue 
University, 1936. 

(3) U.S. Patent 1,967,667, filed October 4, 1933, 
issued July 24, 1934, to H. B. Hass and E. B. 
Hodge, assigned to Purdue Research Founda- 

(4) Henry, L. , Compt. rend. 121 , 210 (1895); Rec. 
trav. chim. (2), _16, 256 (1896). 

(5) Hofwimmer, F. , Z. ges. Schiess-u. Spreng- 
stoffw. 7, 43 (1912). 

(6) Henry, L. , Bull. acad. roy. Belg. (3), 33, 
115 (1897). 

(7) U.S. Patent 1,691,955, filed April 15, 1927, 
issued November 20, 1928, to F. H. Bergeim, 
assigned to du Pont Company. 



(8)RI 0003, October 4, 19 — , p. 4931. 

October 18, 19 — , p. 5156. 
November 1, 19 — , p. 5396. 

J. J. Smith 

August 10, 19 — 


RI 0010 


- #2 




RI 0010 


- #3 




RI 0010 


- #4 




RI 0010 


- #5 




RI 0010 


- #6 




RI 0010 


- #7 





Wilmington, Delaware 
February 7, 19 — 

RI 0080 Jones - Phenol Treatment of Solutions 
from X Process Closing Report 


Four methods of removing water from a solu- 
tion of 3% phenol and 4.5% hydrochloric acid 
obtained in the X process were investigated. 
These methods were: (1) spray evaporation; (2) 
submerged combustion; (3) tower concentration; 
and (4) vacuum evaporation. The last two were 
found to be usable but not entirely satisfac- 
tory. The tower concentration method is better. 
It produces lower yields, but these are compen- 
sated for by cheap equipment. 



Further consideration of the X process is 
not recommended. 

This investigation was first reported on 
November 6, 19 — , and is now closed. 

Work done under RIs 0061 and 0069 for de- 
veloping a method of phenol manufacture resulted 
in the choice of the X process as the only prac- 
tical process available to us from a patent 
standpoint. In the X process, chlorobenzene 
vapor and water are passed through a tube main- 
tained at a temperature of about 165°C. A solu- 
tion is formed which contains about 3% phenol, 
4.5% hydrochloric acid, 90% water, and also some 
unreacted chlorobenzene. Under these earlier 
investigations, all steps of the process were 
worked out except the final one of concentrating 
the weak phenol solution. The present investi- 
gation was undertaken for the purpose of testing 
some methods of concentration which appeared to 
have promise. 

The use of ordinary evaporating equipment 
is impossible because of the hydrochloric acid 
present which will attack any metal which is 
cheap enough to use. 

Four methods of concentration were con- 
sidered: (1) spray evaporation ; (2) submerged 
combustion; (3) tower concentration; and (4) 
vacuum evaporation. 

Spray evaporation was dismissed from con- 
sideration when both A. B. C. Company and X. Y. 
Z. Company declared that the presence of hydro- 
chloric acid constituted an insurmountable 

The method of submerged combustion consists 
in operating a gas burner submerged beneath the 



liquid to be concentrated. Under RI 0061, it 
was applied to a phenol solution with some 
degree of success, (1) although a rather high 
loss of phenol occurred during the evaporation. 
Further experiments failed to reduce this loss 
to a reasonable figure. (2) As the manufacturer 
of submerged combustion equipment was unable to 
suggest any adequate changes in equipment, this 
method was rejected. 

The method of concentrating phenol solu- 
tions by passing hot combustion gases from pro- 
pane up a tower against a descending stream of 
solution was tried previously under RI 0061 
without a great deal of success, due to the com- 
bustion of phenol. (3) It was thought that the 
combustion was caused largely by incomplete wet- 
ting of the packing by the small liquid flow. 
Further trials were made using a recirculating 
system in order to increase the liquid flow. (4) 
From yield values, it was estimated that a maxi- 
mum yield of 90% could be expected by using this 

The fourth method of vacuum concentration 
was tried by flashing a hot phenol solution into 
a steam-jacketed tube maintained at a moderately 
high vacuum. (5) Yields of 96% phenol were ob- 
tained by this method. This method has the dis- 
advantages of requiring expensive equipment and 
of possibly giving smaller yields when carried 
out in large-scale equipment, since experiments 
showed that heat-transfer coefficients decreased 
as the diameter of the tube increased. 

The conclusions based on these experiments 
are that, of all the methods investigated, only 
the tower concentration and vacuum evaporation 
methods are usable. Neither one is particularly 
good. Of the two, the former is the better. It 



produces lower yields, but these are compensated 
for by cheap equipment. 

It is recommended that consideration of the 
X process be dropped. 

This investigation was opened October 15, 
19 — , and now is closed. 

(1) RI 0061, Sept. 25, 19—, p. 5802. 

(2) RI 0069, Nov. 6, 19 — , p. 6374. 

Dec. 4, 19 — , p. 7036. 

(3) RI 0061, June 26, 19 — , p. 4009. 

Aug. 28, 19 — , p. 5293. 
1, 19 — , p. 56. 
5, 19 — , p. 677. 
1, 19 — , p. 53. 
5, 19 — , p. 671. 

(4) RI 0069, Jan, 


(5) RI 0069, Jan. 


B. B. Jones 

February 21, 19- 


RI 0080 Jones - #2 
RI 0080 Jones - #3 
RI 0080 Jones - #4 

February 7, 19- 
February 7, 19- 
February 7, 19- 


Wilmington, Delaware 
July 5, 19— 

RI 0045 Black - Cellulose Derivative Q - Use in 
Various Industries 


A. B. C. Paper Company 

An investigation of cellulose derivative Q 
hot-melt adhesives for bonding cellophane to 
paper showed that the poor bonding obtained when 



using medium-viscosity cellulose derivative Q 
and tricresyl phosphate as plasticizer can be 
overcome by substituting low-viscosity cellulose 
derivative Q and Hercolyn as plasticizer. 

A patent letter is being submitted. 
X. Y. Z. Label Company 

" A preliminary examination of various nitro- 
cellulose solvents, made at the request of the 
X. Y. Z. Label Company, failed to reveal one 
which did not dissolve cellulose derivative Q. 

A. B. C. Paper Company 

Mr. John Doe of the A. B. C. Paper Company 
asked Mr. George Smith for some suggestions on 
formulating a cellulose derivative Q hot-melt 
adhesive for bonding cellophane to paper. He 
had tried the formula in the "Cellulose Deriva- 
tive Q Adhesives" booklet containing 18% of 
medium-viscosity cellulose derivative Q, 14% 
tricresyl phosphate, and 68% Staybelite A-l. 
This formula gave poor bonding, and because ad- 
hesion failed in numerous areas, air bubbles 
appeared between the cellophane and paper giving 
the sheet a grayish appearance. 

This problem was investigated for Mr. John 
Doe. Laminated sheets were made using adhesives 
composed of cellulose derivative Q of varying 
viscosity, various plasticizers, and Staybelite 
A-l. The particular plasticizers used were 
Plast-Oil (a paraffin oil; M. N. 0. Chemical 
Co.), castor oil, Hercolyn, and tricresyl phos- 
phate. The formulas tested are shown in Table 
1. The formula containing 18% low-viscosity 
cellulose derivative Q, 16% Hercolyn, and 66% 
Staybelite A-l proved to be the best of those 
tested as flotation reagents with negative re- 



Mr. Doe had been using. The product was free 
from bubbles and possessed good adhesive 
strength. The information was given to Mr. 
Smith to be transmitted to Mr. Doe. 

A "Record of Invention" is being submitted. 
X. Y. Z. Label Company 

The X. Y. Z. Label Company, in the letter 
C40-3/43679 dated June 12, 19 — , inquired about 
a solvent for nitrocellulose that would not 
attack cellulose derivative Q. Examination of a 
number of solvents, including acetone-heptane 
mixtures and ether-alcohol mixtures, demon- 
strated that the common nitrocellulose solvents 
were also solvents for cellulose derivative Q. 
In fact, all the solvents that were tested dis- 
solved cellulose derivative Q with greater ease 
than nitrocellulose. See Notebook X1300, p. 81. 

B. B. Black 

July 7, 19— 


RI 0045 Black - #2 July 5, 19 — 


Wilmington, Delaware 
September 26, 19 — 

RI 0025 Brown - Terpene Sulfur Compounds - 
Preparation ~~~~~ 
__ ^ DIGEST - 

In previous progress reports under this in- 
vestigation, terpene sulfides were prepared and 
tested and markedly superior to the one which 



suits. From theoretical considerations, there 
was reason to believe that terpene mercaptans 
would be satisfactory flotation reagents. How- 
ever, no method of preparing these compounds was 
known. It was suggested that terpene hydrocar- 
bons might add hydrogen sulfide directly to form 
mercaptans. To test the possibility of this re- 
action, experiments were carried out, during the 
period covered by the present report, in which 
hydrogen sulfide was bubbled through separate 
samples of pinene and also of Dipolymer at at- 
mospheric pressure and room temperature in the 
presence of catalysts. 

Catalysts employed with pinene were 85% 
phosphoric acid with and without Darco, 90% 
phosphoric acid, and 32% sulfuric acid. The 
best results were obtained with the use of a 
catalyst consisting of 85% phosphoric acid and a 
small proportion of Darco. The sulfur content 
of the product indicated that the apparent yield 
with such a catalyst was 94%. Without Darco 
conversion was 68 and 81% with 85 and 90% phos- 
phoric acid, respectively. With 32% sulfuric 
acid, the yield was 83%. Dipolymer when tested 
similarly with 85% phosphoric acid and Darco 
gave a somewhat lower yield. 

Further experiments will be carried out 
with pinene under other reaction conditions. It 
is planned to carry out the reaction under su- 
peratmospheric pressure. The pure mercaptan 
will be isolated and tested as a collector in 
ore flotation. 

A. B. Brown 

September 30, 19— 


RI 0025 Brown - #2 




Wilmington, Delaware 
October 5, 19 — 

RI 0039 Gr een - Product X - Use in Various 


Five problems were worked on under this 
general investigation during the past month. 

Furniture manufacturers now require more 
printproof furniture finishes because of recent 
changes in packing procedure. It was thought 
that this might be a good field for Product X 
finishes, since most varnishes cannot meet the 
requirements, although nitrocellulose lacquers 
can. To obtain data for protective coating 
manufacturers at the Paint Show, a number of 
Product X lacquers were prepared and subjected 
to printproof and cold check tests. The best of 
the samples were printproof to a pressure of 2 
lb. per sq. in. applied after a 30-hr. drying 
period at room temperature and to a pressure of 
5 lb. per sq. in. after being force-dried over- 
night. They withstood 5-10+ cold check cycles. 
These results were fairly satisfactory. 

At the request of the Great Lakes Manufac- 
turing Company, attempts were made to find an 
odorless emulsifying agent for Product X solu- 
tions to be used in formulating adhesives. 
Methyl cellulose was found to be satisfactory. 

Mr. Griffin, of the Troy Paint and Oil 
Company, Inc., claimed that an enamel pigmented 
with chrome yellow and containing 1 part of 
Product X to 3 parts of Ester-Resin CM (alkyd 



resin solution; Garner Resin Co.) dried slower 
than the enamel without the Product X. Tests 
made on these enamels indicated that Product X 
speeds the drying rate of enamels pigmented with 
chrome yellow, as it is known to do for enamels 
pigmented with other pigments. No explanation 
of Mr. Griffin's results can be made, except 
that perhaps he made a mistake either while pre- 
paring his enamels or while examining his 

Routine compatibility tests showed that 
ML-5 plastic izer (butyl ethylene glycol palmi- 
tate; A. B. C. Plastics Co.) and Ester-Resin C 
(alkyd resin; Garner Resin Company) are compat- 
ible with Product X, but that Ester-Resin CS 
(alkyd resin solution; Garner Resin Company) is 
incompatible. Orders were received for seven 
samples for the trade. These have been prepared 
and shipped. 

R, B. Green 

October 7, 19— 


RI 0039 Green - #2 


J. R. Blank May 11, 19— ~~ Page 1 


Mr. George S mith, General Manager 

I made this call at the request of Mr. 
William Jones, who met Mr. Smith at a recent 

* The several departments provide special blank forms for Trade Reports (Technical Service 
Reports). The example given here, therefore, does not conform exactly to the arrangement of any 
actual report, but it does show the kind of information to be included. 



convention of the American Association of Tex- 
tile Chemists and Colorists. This company manu- 
factures fused stiffened collars to be used in 
their shirts, and there seemed to be a possibil- 
ity that they might be interested in using one 
of our products in the thermoplastic interlayer. 

Mr. Smith informed me that in their regular 
production of fused collars they use a stiffen- 
ing process, by which a fabric interlaye*, con- 
taining cotton threads and cellulose acetate 
threads, is fused by heat and pressure to two 
outer layers. They pay a royalty to the Ad- 
hesive Company. The collar is not entirely 
satisfactory because of a tendency to separate 
on repeated laundering. Mr. Smith would like to 
develop a better collar. He has been experi- 
menting with a simplified method for making 
fused collars, whereby a heavy backing cloth is 
applied to a broadcloth by means of an adhesive, 
thus eliminating the fabric interlayer. This 
process is basically covered by U.S. Patent 
009,999 issued in 19 — to B. H. White. The only 
bonding material Mr. Smith has tried to date is 
cellulose acetate. He found that it gave too 
stiff a bond and was too sensitive to water. 

I suggested to Mr. Smith that Synthetic 
Resin A adhesive might be more satisfactory, and 
advised him to get some adhesives manufacturer 
to help him in formulating adhesives suitable 
for the job. He agreed to follow this sugges- 
tion. He estimated that they might be able to 
use annually 10,000-20,000 lb. of the material 
in shirt collars. 

Since the interview, I have arranged for 
Mr. Smith to work on this problem with the X. Y. 
Z. Lacquer Company, which is a company that is 
doing progressive work with Synthetic Resin A. 



Mr. Brown of this company and Mr. Smith are 
planning to come to Wilmington on June 10 in 
order to discuss with us our experience with 
fused collar adhesiyes. After this discussion, 
we will keep informed on their progress, since a 
potentially large market for this resin is in- 

J. R. Blank 

May 13, 19— 



SUBJECT: Poly-pale Resin Overprint Varnishes 
CHARGE: RI 4287 

CORRESPONDENCE: W. L. C. to J. N. D. C67-11, 

dated 8/4/— 
WORK RECEIVED: Aug. 5, 19— 
WORK REPORTED: Aug. 11, 19— 
NOTEBOOK: X3215-l,2 
COPY TO: J. N. Doe 

A. B. Blank 
Glotz, Limited, Toronto, supplied two 
labels coated with overprint varnishes. One of 
these varnishes was prepared with Poly-pale 
resin and the second with their standard No. 1 
varnish resin. The customer claimed that the 
label prepared with their standard overprint 
varnish is brighter, has more gloss, and is 
slightly less wavy than that overprinted with 
the Poly-pale resin varnish. 



TO check these claims, examinations of the 
labels were made. Table 1 shows spectrophoto- 
metric analysis of the two labels. It will be 
observed that the brightness of the white, 
green, and red appearing in the label is equiva- 
lent regardless of the varnish employed as an 
overprint. In excitation purity, the Poly-pale 
resin gave slightly lower values indicating it 
to have the lesser effect on the colors on which 
it is superimposed. The differences in values 
are so slight that little advantage can be 
claimed for Poly-pale in this property. It will 
be observed that the No. 1 overprint varnish 
caused slightly better gloss than the Poly-pale 
product. Determinations of the thickness of 
coating for each of these varnishes were as 
follows : 

Varnish No. 1 3.6 lb. /ream 

Poly-pale Resin Varnish 3.4 lb. /ream 
This difference in thickness of film is 
almost negligible and would not be considered 
significant in ordinary usage. However, it is 
the writer's opinion that it accounts for the 
very slight difference in gloss observed between 
the two coated labels. It is believed that this 
slight difference in gloss accounts also for the 
customer's opinion as to variation in bright- 
ness, since there was nothing in the results of 
spectrophotometer examination to account for 
this opinion. 

The labels as received had been bent 
through handling, and no difference in appear- 
ance as to waviness could be observed. 

It is believed that a slightly heavier 
coating of the Poly-pale varnish will probably 
give the customer the effect desired. 






No. D6 


ness % 








Purity % 




No. 1 Varnish 

White 8997 
Green 8997 
Red 8997 


Specular Gloss (a) 

Gs at 45°, in % 
Poly-pale Resin 3.49, 3.44, 3.43 Av. 3.45 
No. 1 Varnish 3.96, 3.62, 3.48 3.69 

(aJAll gloss values taken on white (imprinted) 
portions. Gs indicates specular reflection. 

A. B. Blank 

August 11 f 




• Use vernacular terms or plant jargon. 

• Use a long word where a short one is enough. 

• Make your digest long and detailed. 

• Assume that every reader knows all the properties of a prod- 
uct; "nitrocellulose' ' is not just nitrocellulose; it has a definite 
nitrogen content and viscosity. 

• Write detailed descriptions of methods that are well known 
and given in detail elsewhere. 

• Assume handbook or other published values are necessarily 
accurate for a specific sample; a compound or composition 
may be produced with a range of properties. 

• Include new information in closing report. 


• Try to organize your report in your mind before you begin 

• Keep your readers and their interests in mind when writing 
a report or digest. 

• Be as brief as is consistent with reasonable completeness. 

• Follow the rules of grammar, spelling, and punctuation. 

• Describe your materials accurately and adequately. 

• Make full use of tables and graphs to facilitate comparison 
of data. 

• Confine detailed description of methods and results to the 
Experiment Section. 




Preparation of Mss. for 
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Table 23: Proportion of Morons in Total Population, United 
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footnote or footnotes giving the source. Do not be afraid of 
making your citations too numerous. Superfluous references 
can be removed in editing; it is most troublesome (to put it 
mildly) to add to them later. Footnotes should be made as 
nearly complete as possible in the first draft of ms. and should 
be carefully carried over to all subsequent drafts. All cross- 
references or other references should be written as footnotes, 
not in the text. Cross-references in each draft should give the 
page numbers of the ms. Use superior figures to indicate foot- 
notes in text and also in tables where the footnotes are numer- 
ous. Ordinarily, in tables superior letters should be used against 
the numerical part of tables and superior figures against words. 
Do not use asterisks, stars, daggers, half moons, double crosses, 
black hands or any esoteric symbols. They don't scare the 
editor; they only make him mad. Footnotes should be num- 
bered consecutively on each page, never, never, never, con- 
secutively throughout the report. 

Footnotes should give all and only the essential information 
which will enable the reader to get a clear idea of the character 

1 Editor's Note: The statements under this heading are again not rules but 
suggestions, important only in the sense that a suggestion about fastening 
the parachute to yourself before you jump out of the balloon is important. 



of the authority cited and refer easily to or obtain the source 
if he desires. The following, in the sequence and form indi- 
cated, should be given. 

(a) The author, compiler, institution, or organization responsible 
for the matter. Give initials or first name first. In the case of 
governmental publications, without individual author, give 
the general governmental division first, the special bureau or 
division issuing the matter, second. See examples "2" and "4" 
below. Where an institution or organization issues a publica- 
tion bearing an individual author's name first, as a general 
rule give the author's name first, the title of the material 
second, and the institution third. If an editorial in a periodi- 
cal, give name of periodical as the author. 

(b) The title, if any, of book or article (in quotation marks, unless 
designated only by a number or general characterization as: 
Decennial Census; Final report; Report No. 14, etc.). 

(c) Any special designation in addition to the title, giving the 
periodical or number in a series of publications in which the 
matter appears. Names of periodicals should be italicized, i.e., 
underscored in the ms. 

(d) Place of publication. 

(e) Date of publication. In case of periodicals give month and 
year, not volume number. 

(f) Volume, chapter, section, or page. Generally give only page, 
but make the specific location as explicit as is necessary. 

In some instances, as where an article cited is included in a 
collection of articles with another title, or where the citation 
is from an author quoted, without reference, in the work of 
another person, it is desirable to make the reference explicit 
by saying, for example: 

Wilson, Woodrow. Cited in: Simons, F. W., "Fizzles of the Twentieth 
Century," Century Company, New York, 19 18, p. 6. 

The first reference to a source should be complete. In all 
subsequent references to the same source, do not repeat in 
footnote name of author, article, publication, or other infor- 
mation already given in the text. 

Reference to a source already cited should be made by giv- 



ing the author's last name (or part of the title, where there is 
no author) followed by op. cit. For example: Seager, op. cit., 
p. 47; or "Memorandum on the Minimum Wage, etc.," op. cit., 
p. 62. Where, however, several works by the same author have 
previously been cited, the title, whole or abbreviated, of the 
particular work in question should be repeated. 

Where references to the same source immediately follow 
one another, ibid., meaning "in the same place," or "in the same 
work," should be used, followed by the page. Ibid., stands for 
as much of the preceding reference as is repeated. 

Where the reference is to the identical page of the same 
source as in the reference immediately preceding, idem, mean- 
ing "the same," should be used. Parts of the citation should be 
separated by commas. Composite footnotes, containing refer- 
ences to several works, should be set as one paragraph, with 
citations separated by semicolons. Names of periodicals, and 
op. cit., ibid., idem should be underscored. Op. cit. and ibid, 
art abbreviations and require periods. 


1 National Industrial Conference Board, "Hours of Work as Related to 
Output and Health of Workers-Cotton Manufacturing," Research Report 
No. 4, Boston, March, 1918, p. 55, footnote. 

2 United States Bureau of Labor Statistics, "Profit Sharing in the United 
States," Bulletin No. 208, Washington, D. C, 1916. 

3 United States Bureau of Labor Statistics, Monthly Labor Review, Wash- 
ington, D. C, August, 1919, pp. 90-91. 

4 United States, Commission on Industrial Relations, Final Report and 
Testimony, Vol. IV, 64th Congress, 1st Session, Senate Document No. 415, 
Washington, D. C, 191 3, p. 3,607. 

5 Bureau of Labor Statistics, "Profit Sharing in the United States," op. cit., 
p. 16. 

6 Wilberforce Thaddeus Sludge, "The Economic Importance of Free 
Verse," New York, 1922, p. 92. 

7 United States, 62nd Congress, 2nd Session, Senate Document No. 870, 
Washington, D. C., 1909, pp. 170-175. 

8 N. P. Gilman, "A Dividend to Labor," New York, 1899, p. 92. 

9 Idem 



10 Edward E. Pratt, "Dietary Studies in Armenia, Turkestan and Green- 
wich Village," cited in J. H. Friedel, "Martyrs of Science," Brooklyn, 1932, 
pp. 4ff. 

11 Great Britain, Ministry of Labor, Labour Gazette, London, June, 19 18, 
pp. 216-218. 

1 2 Wilberf orce Thaddeus Sludge, "Musical Comedy and Mass Action," 
The Clarion Pamphlets, No. 4, New York, April, 1928, p. 6. 

13 Ibid., pp. 2-3. 

14 Mae West, "Causes of Suicide Among the Suburban Population," In: 
"Pressing Social Problems," Annals of the American Academy, Philadelphia, 
1928, pp. 69-75. 

15 Gilman, op. cit., p. 26. 

16 Massachusetts, Bureau of Statistics, Decennial Census, 1915, Boston, 1916, 
Part II, p. 227. 

17 A. D. Williams, "Design of Open-Hearth Furnaces," Iron Age, New 
York, April 29, 1930, p. 592. 

18 Liberator, New York, January, 192 1, p. 56. 

19 M. L. Stecker, "The Effect of Wage Earners' Diet on Weight," Inter- 
national Labour Organization, Bulletin No. 964, Geneva, March, 1926, pp. 6 f. 

20 "Musical Comedy and Mass Action," op. cit., p. 6. 

Pamphlets, Letters, Documents, Legislative Bills or Single 
Sheets. Footnotes referring to such sources should be as ex- 
plicit as the incomplete nature of the document will permit. If 
undated, use the letters, n.d., signifying "no date," and if the 
pamphlet is small, the number of pages it contains is helpful 
for identification. It is desirable also to give the place where 
issued. Examples: 

1 General Motors Corporation, "Modern Housing Corporation Homes for 
Employees," pamphlet, 16 pages, New York, 1919, p. 15. 

2 United States, H. R. 2697, Nov. 2, 1920. (Form for a law passed) 

3 General Motors Corporation, Announcement regarding profit sharing, 
Single Sheet, Detroit, n.d. 

4 New Mexico, Senate Bill No. 694, Introduced March 24, 1920. (Form for 
a bill introduced) 

5 Calvin Coolidge, Letter to National Industrial Conference Board, April 
1, 1923. 

Legal citations should follow the established form for such 



In footnotes the following abbreviations are to be used: 










E p - 



"and the following page" 




"and the following pages' 









Abbreviate all names of months in footnotes. 

Do not use such forms as vide for "see" or vide supra for "see 
above," or irtfra or et seq., but use the English words where 
such expressions are needed. Do not use loc. cit. 

As regards the use of figures, abbreviations, capitalization, 
spelling, quotations, headings and punctuation, the author 
ought not, for his own peace of mind, to abandon the buck to 
the stenographer or typist. They are very charming girls, and 
in order to preserve their charm they should not be expected 
to keep too many such details in their heads. The instructions 
to the stenographic department cover only the general form 
of typing according to "Report Style," and the author in writ- 
ing or dictating his report should indicate painstakingly what 
he wants done in respect of figures, capitals, spelling, quota- 
tions and headings and punctuation. 

The following general rules cover the more important ques- 
tions in this regard. When in doubt consult the editor. 

4. Use of Figures 

Spell out— 

i. Numbers below 101 in ordinary reading matter, and num- 
bers requiring only two words when spelled out, except 
when they come in groups of six or more occurring in 
close succession. Use "48-hour week," but "a work week 
of forty-eight hours," and "eight-hour day." 



2. Such designations as: eighteenth century; Thirteenth In- 
fantry; Fourteenth Amendment; Sixty-seventh Congress 
(except in footnotes). 

3. Any number occurring at the beginning of a sentence, 
and the number one, except in percentage. 

4. Ordinary fractions, and percentages less than one. 
Use figures for 

1. Any number requiring more than two words when 
spelled out. 

2. Decimals; degrees; dimensions; money; percentage; 
weights. In financial statistics the form $483 million is 
now generally used. 

In general, when in doubt spell out numbers, and make all 
numbers in connected groups alike— all spelled out or all in 
figures. If the highest figure is to be spelled out, all should be. 

Tables and diagrams should be numbered and referred to in 
Arabic numerals; chapters in Roman numerals. 

5. Abbreviations and Symbols 

(a) Do not use U. S. for United States. 

(b) Abbreviate "Company" only when it follows "&." "&" 
should be used only when the designation of a firm con- 
sists of proper names. The form of the names of all firms 
should, however, be verified, as individual practice differs 
in this regard. 

(c) Spell out names of cities, except in tables. 

(d) Spell out names of states except when following the name 
of a city. 

(e) Do not italicize viz., i.e., or e.g. 

(f) Use the per cent sign throughout except in tabular head- 
ings and in general, non-statistical statements such as 
"about ninety per cent of the American women are 
pretty." Repeat the per cent sign in such expressions as 
"from 13% to 15%." Do not use a period after "per cent." 

6. Capitalization 

General Rule— When in doubt do not capitalize. 
Capitalize the names of regularly organized, appointed, con- 
gressional, federal, or official bodies, as Young Men's Christian 



Association, The Ways and Means Committee, the Detroit 
Chamber of Commerce, the Oshkosh Board of Trade, the Boy- 
Scouts of America, the Squeedunk City Council, the Supreme 
Court, the Universal Women's Union, etc., when referring to 
them specifically and fully, but not such general expressions as 
assembly or the chamber of commerce, city council, board of 
trade, court, state. 

Do not capitalize designations of individuals unless used as 
part of a proper name, as, chairman, president (but President 
of the United States), the superintendent of schools, member 
of the city council, secretary of the Textile Council, and so on. 
Chairman Smith of the Brotherhood of Bootleggers, Home- 
brewers and Rum Runners, No. 634, but John Smith, chairman 
of the bootleggers' local. John Smith, superintendent of 
schools, but Superintendent Smith. 

Capitalize Congress, Senate, House, Federal and Govern- 
ment, when speaking of the Federal Government, the French 
Government, the Sixty-third Congress, etc. but not govern- 
mental, congressional, federal, etc. 

Do not capitalize spring, summer, fall, or winter; eastern, 
western, etc. but use "the East," "the West," etc. 

Do not capitalize board, commission, committee, and so on, 
unless the board, commission or committee has become estab- 
lished, as an official or authoritative body of a permanent 
nature and is referred to by the full name. Make explicit all 
references to the same board, institution or organization sepa- 
rated by considerable text, by repeating the full designation. 

Capitalize City in New York City and State in New York 
State. Do not capitalize state in such expression as "the power 
of the state" or "city elections," "the state of Wisconsin," the 
Pacific Coast states, state laws, etc. 

Capitalize historical events, like the Revolution, the World 
War, the Armistice. 

7. Quotations 

In preparing ms. long quotations (as a general rule, over ten 
lines) should be indented and single spaced, and so indicated to 



the stenographic department. But such quotations should be 
avoided whenever it is possible, by taking thought, to para- 
phrase them or give them substance. 

Quotation marks should be used on all quotations. 

Three periods (thus . . .) denote an ellipsis, or the omission 
of words or sentences. Don't be generous or mysterious and 
use more. Three is quite enough to stimulate anybody's curi- 
osity. The three (...) are in addition to the period, when the 
ellipsis comes between sentences, and are in addition to any 
other punctuation marks. Use three periods (...) in beginning 
a quotation only when the quotation starts in the midst of a 
paragraph of the original. The (...) should end a quotation 
only when it ends with an uncompleted sentence of the origi- 
nal. When quoting paragraphs separated in the original by 

other matter use five periods ( ) between the paragraphs 

to indicate the ellipsis. 

8. Spelling 

The "New International 2nd Ed. Dictionary" in the Library 
is the authority on spelling for our reports and should be con- 
sulted freely even by the best spellers. The following are ex- 
ceptions or additions to the spelling given in "the Standard 
Dictionary" or that book: 

wage earner 
mine worker 
piece work 
piece worker 
hand work 
day work 
day worker 
machine work 
eight-hour day 

48-hour week 
trade union 
work week 
week work 
work day 
working week 
piece rate 
day rate 
time rate 
wage rate 

profit sharing 

bonus system 







In general, avoid the hyphen, except in adjectival combina- 
tions, and where it is not awkward looking, make one word of 
a compound word. Otherwise two words, are to be preferred. 


A Method of Outlining the 
Academic Research Thesis 

TOPIC: The Principles of Inventory Control 

A. Statement of the Problem, Definitions, and Methods of 

1. Statement of the Problem 

a. Introduction (this should be limited to two or three 

b. The purpose of inventories in industry 

c. Investment in inventories 

( 1 ) Comparison of inventories of several concerns (sub- 
heads as required) 

(2) Ratio of inventory to current assets (subheads as 

d. Need for control of inventories (subheads as required) 

e. Types of inventories (subheads as required) 

f. Benefits of control of inventories 

g. The problem of this thesis: ("To determine the funda- 
mental principles which underlie the establishment of 
an adequate system of inventory control") 

2. Scope and Limits of this Study (confine study to a specific 
type of industry or concern) 

3. Definitions of Important Terms Used in this Study 

a. Principle 

b. Inventory 




c. Control 

d. Inventory turnover 

e. Material requisition 

f . Credit slip 

g. Records 

Methods of Research Used in Preparing this Study 

a. Participation (actually doing work in the field) 

b. Observation 

c. Personal interview 

d. Using general sources of information 

e. Letters to authorities 

f. Use of questionnaire 


B. The Principles of Inventory Control: 

i. Requisites of a Principle 

a. Various definitions of the term Principle 

( 1 ) That which is inherent to anything determining its 

(2) A settled law or rule of action 

(3) A fundamental truth 

(4) A comprehensive law or doctrine from which 
others are derived, or on which others are founded 

(5) The foundation or beginning (thus may be applied 
to any fundamental truth which is universal within 
its province) 

b. Elements of the above definitions and their frequencies 

"Law" "Universal "Fundamental 
Application" Truth" 


(2) X 

(3) X 

(4) K 

<*> _ £ 

2 I I 

c. Requisites of a principle 

( 1 ) It must be fundamental in character. 



(2) It must be a truth. 

(3) It must be universal in application. 

2. The requisites of inventory control (Discover these requi- 
sites by an examination of the practices in industry, or a 
study of the literature, or both. The following list is sug- 
gestive only.) 

a. Adequate system for receiving materials 

b. Adequate supply of raw materials for planned produc- 

c. Minimum capital investment in inventories consistent 
with planned production 

d. Adequate records of inventories and their location 

e. Adequate system of classification and identification of 
raw materials 

f. Adequate methods for salvaging scrap 

g. Adequate system for storing materials 

h. Materials delivered on authorized requisitions 

i. Unused materials returned to stores on credit slips 

3. The recorded principles of inventory control (State the 
principles of inventory control which have been discovered 
in practice or in the various books on the subject. The fol- 
lowing list is suggestive.) 

(1) The scientific determination of the economic volume 
of inventory to be carried consistent with production 
and sales requirements. 

(2) Materials must be replenished so that economic volume 
may be maintained. 

(3) Materials should be stored as near the point of usage 
as possible, consistent with requirements. 

(4) Physical control of material is based upon definite re- 
ceipt, adequate protection, and specific issuance of 

(5) Physical control must be supplemented by a system of 
timely and adequate records. 


(7) • • • 

4. Analysis of the recorded principles 

a. Classification and grouping of the principles (Classify 
and group according to factors.) 



b. Determination of frequency of factors in the recorded 
principles (analysis to determine factors consistent with 
the requisites of material control) 

c. Measurement against criteria established for principle 
(see IIBi) and for inventory control (IIB2) (In this 
connection, restate briefly the principles discovered.) 

(Chapters III-IX are devoted to an explanation, discussion, and 
application of each principle discovered. The plan of Chapters 
IV-IX should be similar to that of Chapter III.) 


A. Explanation and Discussion of the Principle of Eco- 
nomic Volume of Inventory: 

1. Economic volume (explanation) 

a. Maximum limits 

(1) Determining the maximum limit (factors involved) 

b. Minimum limits 

(1) Determining the minimum limit (factors involved) 

c. Effects of inventories above or below the limits 

d. Inventory turnover 

(1) Relation of inventory turnover to other factors 

e. Slow-moving inventories 

f. The ordering point 

( 1 ) The factors involved 

2. Responsibility for Determining the Economic Volume 

a. Policies 

b. Production control function 

c. Purchasing function 

3. Responsibility for Control of the Economic Volume 

a. Policies 

b. Production control unit 

c. Materials budget 

4. Application of the Principle to the Company Under Con- 
sideration (subheads as required) 




A. The Findings, Conclusions, and Recommendations: 

1. Summary (a brief review of the entire study from the prob- 
lem to the end) 

a. Principles discovered 

2. Statement of the Findings or Contribution 

a. State each of the new factors discovered 

(1) Discuss the factor 

(2) Explain practical application of the factor 

b. If new technique, describe the new technique 

(1) Explain practical application of the technique 

3. Limitations of this Study 

a. Study limited to a particular type of industry or indi- 
vidual enterprise 

(1) Reasons for selection (subheads as required) 

(2) Limiting factors within the specific industry or 
enterprise chosen (subheads as required) 

(3) Limiting factors regarding economic inventory 
volume (subheads as required) 

b. Conditions and circumstances which prevent more thor- 
ough study 

(1) Writer's lack of time, money, means 

(2) Unavailable or insufficient criteria to perform thor- 
ough study 

(3) Important factor unaccounted for 

(4) Unexplained phenomena 

(5) Poor physical conditions surrounding the objective 

4. Suggestions Regarding further Study of Inventory Control 

a. The factors or phases which require further study 

b. Suggested methods of approach for the new study 

c. Factors or phases which the writer was unable to obtain 

5. Conclusions (subheads as required) 

6. Recommendations (subheads as required) 


Sample of Title Page of 
Academic Thesis 

Toe Determination of- The Principles of Purchasing 

Submitted, to the Oraauate School of Business idRlaistrttlon, B«r lork 
University, In partial fulfilment of. the requirements. of the fcipree of 
Master of Business Administration- 


Suggested format of typewritten title page. 

Binding: Allow %" on left-hand side 

Margins: Allow % " on both sides 

Title: 3" from top edge (centered) 

Author's name: 2" below title (centered) 

Authorization: 3" below author's name 

Date: Year only, 1' above bottom edge (centered) 

Suggested format of typewritten inside pages (see page 


Abbreviation, 171 
Accounting, 17 

control, 62 

for research, 51, 52 
Administrative level, 2 

research, 35 
Adopted from, 165 
Advertising, 66, 155 
Advisory activity, 4 
After-sales service, 150 
Analysis, 42 
Analytic procedure, 45 
Appendix, 173 
Applied research, 31, 32 
Asterisk, 166 
Authority, 64 

Bibliography, 173 
Board of directors, 66, 72 
Bond, 59 
Budget, 17 

Budgetary control, 52, 62 
Buildings, 95 
Building accessories, 96 
Business administration, 55 

failure, 20 

management, 1 

policy, 14 

organization, 66, 70 
Buying habits, 145 
By-product, 85 

Capital, 127 
Capitalistic system, 58 
Channels of distribution, 148 
Chapter, 173 
Charts, 13, 15, 164, 166 
control, 15 

process, 15 

progress, 15 
Citation, 165, 167 
City location, 93 
Classification, 120 
Committee, 66, 73 
Compensation, 113 
Competition, 151 
Components of research, 47, 
Conclusion, 47 
Confer, 171 
Consumer, 144 
Contents, table of, 172 
Control, 3 

chart, 15 

executive, 17 

functional, 3 

instruments of, 118 

line, 3 

managerial, 118 

materials, 106 

principle of, 8, 10 

production, 137 

quality, 132 

system, 119 

types of, 3 
Corporation, 58, 71 

officers, 74 
Cost of marketing, 143 

of research, 50 
Customer, 144 

Dagger, 166 
Dash, 165 
Decision, 12 
Department, 66 
Development, 125 
Diagram, 164 



Direct research, 31 
Director of research, 74 
Directorate, 72, 73 
Distribution, 148 
Division, 66 
Double dagger, 166 
Duties of management, 5 

Economic principles, 6 
Edison, Thomas A., 48 
Ellipsis, 165 
Employee morale, 115 

service, 115 
Employer relations, 116 
Employment, no 
Enterprise, 127 

financing, 57 

kinds of, 58 
Equipment requirements, 94 
Evidence, 41 
Executive, 68 

appraisal of, 17 , 

committee, 66, 73 

control, 17 

key, 68 

level, 3 

prospective, 69 

qualifications, 68 

research, 36 

training, 69 

wants, 37 
Expense, 53 
Experience, 46 

Fact, 41 

analysis, 45 

classifying, 44, 45 

collection of, 44 

definition of, 41 

interpretation of, 45 
Failure of business, 20 
Figure, 164 
Finance, 57 

committee, 73 

instrument of, 58 

planning, 58 
Financial security, 114 
Footnote, 165, 175 
Function, 63 
Functional control, 3 
Fundamental research, 30 
Funds, 61 

General manager, 4 
General policies, 14 
Good-will, 160 
Graphs, 164, 166 

Habits of customers, 145 
Handling materials, 138 
Head-notes, 167 
Health, 114 
Heating, 100 
Hypothesis, 41 

Ibid, 170 
Ideas, 85 
Idem, 170 

Illustration, 164, 173 
Index, 175 

Industrial research, 24, 33, 34, 38, 

Inference, 41 
Ingenuity, 49 
Inspection, 132, 133 
Inspection unit, 133 
Inspection research, 135 
Instructions, 17 
Instruments, 58, 118 
Insurance, 122 
Italics, 167 
Integration, 64 

Joint stock company, 70 
Joint venture, 70 
Junior board, 74 

Key executives, 68 




division of, 6 

legislation, 109 

requirement, 108 

supply, 107 

unions, 109 
Legal citations, 167 
Legislation, 109 
Level of management, 2 
Lighting, 99 
Line control, 3 
List of illustrations, 173 
Location, 87, 90 
Loc. cit., 170 

Maintenance, 129, 130, 131 
Management, 1 

decision, 12 

definition of, 2 

duties, 5 

instruments, 13 

levels of, 2 

policy, 14 

principles, 8 

research, 35, 75, 134 

research division, 75 

responsibilities, 6, 56 

scientific, 1, 22 

standard of, 16 

top, 2 

training, 22 
Managerial ability, 21 
Manpower, 103 
Manuals, 13, 15 

organization, 16 

policy, 16 

procedure, 16 

training, 69 
Manufacturing, 124 
Manuscript preparation, 162 
Markets, factors affecting, 81 
Market research, 141 
Marketing, 125 
Marketing costs, 143 

Massachusetts trust, 70 
Material control, 106 
Materials, 103 
Materials handling, 138 
Measurement, 12 
Modesty, 164 
Morale, 49, 115 
Multistory building, 96 
Municipal research, 29 

New enterprise, 127 
New ideas, 85 
New product, 80, 86 
Numerals, 164 

Observation, 46 
Op. cit., 70 
Operating ratios, 119 
Operational policies, 15 
Organization, 9, 55, 63 
chart, 66 

department in, 66 

forms of, 70 

malignancy in, 77 

manual, 16 

permanence of, 77 

principles, 64 

research, 47, 55 

research in, 74, 75 

structure, 9, 65 
Organize, 63 
Outline, 44, 163 
Owner-worker relations, 116 

Partnership, 58, 71 
Passim, 171 
Patent, 26 
Periodical, 175 
Personnel, 109 

employment of, no 

morale, 49 

policies, 109 

qualifications, 48 

safeguarding, in 



sales, 159 

traits, 48 
Picture, 164 
Pilot plant, 128 
Planning, 8, 9, 58, 119 
Plant heating, 100 

layout, 94 

lighting, 99 

maintenance, 129 

preservation, 129 

protection, 98 

research, 75 

underground, 88 

utilization, 97 

ventilation, 100 
Policies, 13, 14, 56, 57 

analysis of, 14 

general, 14 

manual, 16 

operational, 15 

personnel, 109, no 

price, 154 

types of, 15 
Power plant, 96, 100 
Power, purchase of, 96 
Preface, 172 
Premise, 41 

Preservation of reports, 171 

Price, 145 

Price policy, 154 

Principle, definition of, 41 

Principles of centralization, 64 

economics, 6 

human requirements, 65 

inspection, 134 

integration, 64 

maintenance, 130 

management, 8 

materials handling, 138 

organization, 64 

purchasing, 104 

quality, 132 

research, 42 
Problem, 42 

Procedure, 117, 119 

analytic, 45 

manual of, 16 
Product, appeal, 80 

competitor, 84 

control, 137 

development, 79 

legal aspects of, 81 

new, 80, 86 

quality, 132 

research, 83 

testing, 79 
Production control, 137 
Production, fundamentals of, 21 
Profit, 125, 141 
Program, sales, 159 
Project orders, 53 
Promotion, 114 
Proprietorship, 58, 70 
Protection of plant, 97 
Purchasing, 104 
Pure research, 30, 32 


executive, 68 

for research, 48 
Quality, 132 
Quotation marks, 165 
Quotation, use of, 165 

Ratio, 119 
Record, 16, 121 
Report, 16, 162 

outline of, 163 

preservation of, 171 

standardization of, 175 

writing, 162, 164 
Responsibilities of management, 6 

accounting, 51, 62 

budget, 52 

buyers, 145 

by-products, 85 

components of, 47, 50 



competition, 151 
conduct of, 42 
conference, 75 
cost of, 50 
customers, 144 
definition of, 41 
director of, 74 
distribution, 148 
expense, 53 
finance, 51 
inspection, 135 
manufacturing, 124 
marketing, 124, 141 
materials control, 106 
organization, 47, 75 
personnel, 48, 111 
principles, 42 
product, 83 

projects, 17, 62, 75, 79, 82, 92, 96, 
106, 109, 121, 125, 131, 135, 138, 

i44> 152 
purchasing, 105 
qualifications, 48 
team work, 49 
technical, 128 
technicians, 40 
technique, 40 
tools, 135 
traffic, 161 
unit, 47 
Rural location, 93 

Safety, 114 
Sales, 155 

Sales personnel, 159 

Sales program, 159 

Sales volume, 145 

Scientific management, 1, 22 

Scientific method, 12, 41, 42 

Section, 67 

Section marks, 166 

Security, 114 

Selling methods, 142 

Service, 150 

Simplification, 16 
Single-story building, 95 
Social research, 28 
Sole proprietor, 58, 70 
Staff, 4 

Staff research, 36 
Standardization of reports, 175 
Standards, 13, 16, 118 
Stock, 59 
Sub-headings, 163 
Sub-topics, 163 
Supervision, 11, 107 
Symbols, 166 
Synthesis, 42 
System, 119 

Table, 164, 166 

Table of Contents, 172 

Taylor, Frederick W., 1 

Technical research, 127 

Technique of research, 40 

Technological development, 125 

Testing, 79, 128 

Theory, 41 

Thesaurus, 164 

Title page, 172 

Tool research, 135 

Top management, 2 

Topic, 163 

Traffic, 161 

Training, 69, 113 

Training manual, 69 

Transportation, 150 

Underground plant, 88 
Unions, 109 

United States patent office, 26 

Ventilation, 100 

Wages, no 

Waste, 100 

Worker relations, 116 

Writing reports, 164 

Written instructions, 17 


P < ^ i y^ Date , Du ^ ^f. a/A 

MAY 16*5; 



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Business operational research main 

3 12t,2 0320A ISSS